U.S. stocks were lower in early afternoon trading on Tuesday as upbeat consumer price data pointed to a steady build-up in inflation, boosting chances of an interest rate hike later this year.
The Labor Department said the Consumer Price Index increased 0.4 percent last month, the largest gain since February 2013, after rising 0.1 percent in March. That took the year-on-year increase in the CPI to 1.1 percent from 0.9 percent in March.
"This morning the economic news was generally favorable suggesting that ... the U.S. economy has improved to levels warranting something other that crises-level rates," said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management in Minneapolis.
Investors are closely watching data to assess when the U.S. Federal Reserve will raise interest rates. While some Fed officials have suggested two hikes this year, traders are pricing in only one hike at the end of the year.
The Fed could still raise rates two or three times this year, San Francisco Fed president John Williams and Atlanta Fed president Dennis Lockhart, both non-voting members, said in a joint appearance in Washington on Tuesday.
Financial markets do not expect the Fed to hike rates again before September, given sluggish growth at the beginning of the year.
While the labor market has gained strength, inflation has stubbornly remained below the Fed's 2 percent target.
"Equities are generally expected to trend sideways for about a month or so since June will be a pivotal month with a bias towards caution." Sandven said.
At 13:07 p.m. ET (1707 GMT) the Dow Jones industrial average was down 99.75 points, or 0.56 percent, at 17,610.96, the S&P 500 was down 10.58 points, or 0.51 percent, at 2,056.08 and the Nasdaq Composite was down 26.99 points, or 0.57 percent, at 4,748.47.
Seven of the 10 major S&P 500 sectors were lower, with the consumer staples index's 1.42 percent fall leading the decliners.
Procter & Gamble's 1.1 percent fall weighed the most on the sector. Retail stocks fell last week after a string of disappointing results from department stores such as Macy's and Nordstrom.
Home Depot's shares, which have gained 16 percent in the past year, slipped 1.6 percent despite the home improvement company raising its full-year forecast. The stock was the biggest drag on the Dow and the S&P.
AbbVie was down 4 percent at $59.91 after Coherus said the U.S. Patent and Trademark Office agreed to review its petition to make a copy of AbbVie's top-selling drug. Coherus was up 17.3 percent at $19.08
Pandora jumped 7.2 percent to $10.70 after activist hedge fund Corvex Management disclosed a stake and urged the company to sell itself.
Declining issues outnumbered advancing ones on the NYSE by 1,608 to 1,312. On the Nasdaq, 1,662 issues fell and 1,078 advanced.
The S&P 500 index showed seven new 52-week highs and five new lows, while the Nasdaq recorded 17 new highs and 56 new lows.
(Reporting by Yashaswini Swamynathan and Tanya Agrawal in Bengaluru; Editing by Don Sebastian and Saumyadeb Chakrabarty)
This story has not been edited by Firstpost staff and is generated by auto-feed.
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Updated Date: May 18, 2016 00:45:13 IST