Wall Street ends down; investors eye inflation and Omicron



* Fed policy decision awaited on Wednesday

* November PPI logs highest rise since 2010

* Tech leads declines, financials rally (Updates with end of session)

By Shreyashi Sanyal and Noel Randewich

Dec 14 (Reuters) - Wall Street ended lower on Tuesday after data showed producer prices increased more than expected in November, solidifying expectations the Federal Reserve this week will announce a faster wind-down of asset purchases.

The fast-spreading Omicron coronavirus variant also dampened investor sentiment after the S&P 500 index .SPX hit an all-time closing high late last week.

Declines were led by megacap tech-related stocks, with Salesforce.com CRM.N , Microsoft Corp MSFT.O , Adobe ADBE.O and Alphabet Inc GOOGL.O pulling down the S&P 500 and Nasdaq.

Apple Inc AAPL.O ended off its session lows after the iPhone maker said it would require customers and employees to wear masks at its U.S. retail stores as COVID-19 cases surge.

According to preliminary data, the S&P 500 .SPX lost 34.04 points, or 0.73%, to end at 4,634.30 points, while the Nasdaq Composite .IXIC lost 171.54 points, or 1.11%, to 15,241.74. The Dow Jones Industrial Average .DJI fell 99.45 points, or 0.28%, to 35,551.50.

Data from the Labor Department showed the producer price index (PPI) for final demand in the 12 months through November shot up 9.6%, clocking its largest gain since November 2010. That followed an 8.8% increase in October.

About two-thirds of Nasdaq stocks traded below their 200-day moving average, according to Refinitiv data, suggesting many stocks within the index are struggling, even as the overall index remains only about 6% below its November record high close.

"COVID plus inflation is the Grinch that stole Christmas," said Jake Dollarhide, chief executive officer at Longbow Asset Management. "I don’t underestimate the fact that there are some big Nasdaq names giving up some of their big gains. When the leaders sell off, it's not a good sign."

Most of the 11 major S&P 500 sector indexes fell, with tech .SPLRCT putting on the worst performance. Financials .SPSY gained as investors bet on a hawkish tone from the Fed at the end of its two-day meeting on Wednesday.

Berkshire Hathaway BRKa.N BRKb.N and Bank of America BAC.N both gained and helped keep the S&P 500 from falling further.

Many investors expect the U.S. central bank to signal a faster wind-down of asset purchases, and thus, a quicker start to interest rate hikes in order to contain the rapid rise in prices.

"I would say this meeting is when we start to get some clarity on how they're (the Fed) going to address this idea of inflation that has remained elevated and most likely will remain an issue going into next year," said David Keller, chief market strategist at StockCharts.com.

A Reuters poll of economists sees the central bank hiking interest rates from near zero to 0.25%-0.50% in the third quarter of next year, followed by another in the fourth quarter.

Beyond Meat Inc BYND.O rallied after Piper Sandler upgraded the plant-based meat maker's stock to "neutral" from "underweight."

Pfizer PFE.N gained after saying its antiviral COVID-19 pill showed near 90% efficacy in preventing hospitalizations and deaths in high-risk patients, and that lab data suggests the drug retains its effectiveness against the Omicron variant.



U.S. inflation gauges Link



Reporting by Shreyashi Sanyal and Anisha Sircar in Bengaluru
and Noel Randewich in Oakland, California; Editing by Saumyadeb
Chakrabarty, Shounak Dasgupta, Chizu Nomiyama and Dan Grebler

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