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

Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.

All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.

Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.

We are using cookies to give you the best experience on our website. Read more or change your cookie settings.

Risk Warning: Your capital is at risk. Leveraged products may not be suitable for everyone. Please consider our Risk Disclosure.