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US STOCKS-Wall St sinks as hopes fade for rate cuts, trade progress


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* Fed's Powell and Bullard dampen rate cut optimism

* Tech leads all three major U.S. indexes lower

* Allergan jumps on AbbVie's$63 bln purchase announcement

By Stephen Culp

NEW YORK, June 25 (Reuters) - Wall Street stock indexes fellon Tuesday, led by a sharp selloff in technology shares, assimmering trade concerns and disappointing economic data sentbuyers to the sidelines, while the Federal Reserve chairmanpushed back on pressure from President Donald Trump to cutinterest rates.

All three major U.S. stock indexes ended the session in thered after Powell said the Fed was grappling with whether tradeuncertainties and other issues warrant rate cuts.

Speaking at the Council on Foreign relations, Powell alsoreiterated the Fed's independence, a day after Trump tweeted theFed "doesn't know what it's doing." urn:newsml:reuters.com:*:nW1N22I026

Earlier, St. Louis Fed President James Bullard in aninterview with Bloomberg said he does not think the Fed needs tocut rates by a half-percentage point at its next policy meetingin late July. urn:newsml:reuters.com:*:nL2N23W0ZC

Bullard last week said he had dissented at the Fed's Junepolicy meeting because he felt that weak inflation anduncertainties about the economic outlook supported a ratecut. urn:newsml:reuters.com:*:nL2N23S06X

"Powell and Bullard both made comments that were indicativethat we might not see any rate cut in July," said Peter Tuz,president of Chase Investment Counsel in Charlottesville,Virginia. "After last week's meeting, hopes for a rate cut tookoff and that might not be in the picture next month."

"Likewise, last week there was a higher level of hope thatsomething positive will come out of the G20 meeting," Tuz added."As the date approaches that optimism is waning a little bit."

Indeed, U.S.-China trade war anxieties found no relief in aWhite House official's remarks that Trump is "comfortable withany outcome" resulting from a planned meeting with ChinesePresident Xi Jinping at the Group of 20 summit convening inJapan on Friday. urn:newsml:reuters.com:*:nL2N23V1M2

On the economic front, new home sales and consumerconfidence numbers both came in well below economistexpectations, according to separate reports from the U.S.Commerce Department and the Conference Board. urn:newsml:reuters.com:*:nL2N23V1BG

The Dow Jones Industrial Average .DJI fell 179.32 points,or 0.67%, to 26,548.22, the S&P 500 .SPX lost 27.97 points, or0.95%, to 2,917.38 and the Nasdaq Composite .IXIC dropped120.98 points, or 1.51%, to 7,884.72.

Of the 11 major indexes in the S&P 500, ten lost ground,with technology .SPLRCT and communications services .SPLRCL seeing the biggest percentage drops.

"Weakness in those stocks shows people getting out of themarket, out of ETFs," Tuz said.

Rate-sensitive bank stocks .SPXBK were down 0.6%, as U.S.Treasuries benchmark yields US10YT=RR fell below the closelywatched 2% level.

AbbVie IncABBV.K said it would buy Allergan PlcAGN.N for about $63 billion, sending the Botox maker's shares up by25.4%. AbbVie's stock dropped 16.3%. urn:newsml:reuters.com:*:nL4N23W2KP

Tyson Foods IncTSN.N and Pilgrims Pride CorpPPC.O dipped 1.1% and 1.3%, respectively, after the U.S. Department ofJustice opened a criminal probe over possible poultry pricefixing. urn:newsml:reuters.com:*:nL4N23W3S5

Declining issues outnumbered advancing ones on the NYSE by a2.01-to-1 ratio; on Nasdaq, a 1.77-to-1 ratio favored decliners.

The S&P 500 posted 30 new 52-week highs and 6 new lows; theNasdaq Composite recorded 24 new highs and 99 new lows.

Volume on U.S. exchanges was 7.05 billion shares, comparedto the 7.02 billion average for the full session over the last20 trading days. (Reporting by Stephen CulpEditing by Chris Reese) ((stephen.culp@thomsonreuters.com; 646-223-6076;))






This article appears in: Politics , Stocks , Economy , World Markets
Referenced Symbols: ABBV ,



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