Indexes down: Dow 1%, S&P 500 1.2%, Nasdaq 1.9%
Cisco Systems gains after annual revenue forecast hike
Disney warns of long distribution dispute with YouTube TV
Updates late-morning prices, analyst comment
By Twesha Dikshit and Purvi Agarwal
Nov 13 (Reuters) - Wall Street's main indexes fell on Thursday with investors cautious ahead of indications on the U.S. economy and the monetary policy path after President Donald Trump signed a bill ending the longest government shutdown in the country's history.
Markets and the Federal Reserve, which have been reliant on private sources for clues on economic health in the absence of official data, still expect to face gaps after the White House said employment and some inflation reports for October might never be released.
"There's a lot of uncertainties about the state of the economy ... what we're going through is a little bit of a correction in the market in the AI sector and we're seeing market rotation," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
"What's really weighing on investors now is the state of the economy and the prospects of a rate cut in December."
At 11:46 a.m. ET, the Dow Jones Industrial Average .DJI fell 487.04 points, or 1.01%, the S&P 500 .SPX lost 87.37 points, or 1.28%, and the Nasdaq Composite .IXIC lost 443.91 points, or 1.90%.
Information technology stocks .SPLRCT and communication services .SPLRCL were the biggest drags on the S&P 500. Heavyweights Nvidia NVDA.O and Alphabet GOOGL.O lost 4% and 2.5%, respectively. The Magnificent Seven ETF MAGS.K slid 2.3%.
However, Cisco Systems CSCO.O rose 4.5% after the company raised full-year profit and revenue forecasts, betting on demand for its networking equipment.
Technology and AI names have come under pressure lately, with the Nasdaq set for its third straight session of declines, as investors rotated out of pricey tech stocks into traditionally defensive areas such as healthcare.
The Dow .DJI has benefited from the rotation, notching back-to-back record highs after lagging the S&P and the Nasdaq this year.
The S&P 500 Value index .IVX has gained about 1.6% so far this week, whereas its growth equivalent .IGX has dipped 0.3%.
Walt Disney DIS.N fell 8.8%, weighing on the Dow. The media giant signaled it was grinding for a potentially prolonged fight with YouTube TV over distribution of its cable channels.
Recently, data from payroll processor ADP showed private employers shed over 11,000 jobs a week through late October and Indeed Hiring Lab showed a 16% drop in retail-related job postings in October from a year ago, pointing to continued weakness in the labor market.
Several Fed speakers expressed scepticism over another interest rate cut in December, prompting investors to scale back bets. Comments from more policymakers will be parsed through the day.
Traders are currently pricing in an about 49.6% chance of a 25-basis-point rate cut in December, lower than last week's 70%, according to CME Group's FedWatch tool.
Among others, APA Corp APA.N gained 5.8% to top the S&P 500 after a report said Spain's Repsol REP.MC is considering a reverse merger of its upstream unit with potential partners, including the energy producer.
Memory device makers Western Digital WDC.O and Sandisk SNDK.O dropped 3.1% and 10.7%, respectively, each after half-yearly results from Japan's Kioxia Holdings.
Declining issues outnumbered advancers by a 2.17-to-1 ratio on the NYSE and by a 2.65-to-1 ratio on the Nasdaq.
The S&P 500 posted 15 new 52-week highs and 5 new lows while the Nasdaq Composite recorded 43 new highs and 132 new lows.
(Reporting by Twesha Dikshit and Purvi Agarwal in Bengaluru; editing by Maju Samuel)
((Twesha.Dikshit@thomsonreuters.com;))
