The soft finish of the Wall Street came as investors opted to secure profit after a big rally the day before and as report from the Institute for Supply Management showing manufacturing activity contracted for the first time in over two years in the month of November.
Market participants were also awaiting for the US non-farm payrolls data due on Friday, the next big test for investors looking for more signs of a shift from Federal Reserve.
At the close of trade, the Dow Jones Industrial Average index was down 194.76 points, or 0.56%, to 34,395.01. The S&P500 index decreased13.54 points, or 0.09%, to 4,076.57. The tech-heavy Nasdaq Composite Index increased 14.45 points, or 0.13%, to 11,482.45.
Total 7 of 11 sectors of the S&P500 index declined, with financials, consumer staples, and energy issues being notable losers.
Investors are closely watching any updates about inflation to get a better sense of whether the Fed will tone down its aggressive interest rate increases. The central bank has been deliberately slowing the economy in order to tame stubbornly hot inflation. Prices have been falling, but still remain historically high. Fed Chair Jerome Powell said on Wednesday that the central bank could begin moderating its pace of rate hikes as soon as December, when its policymaking committee will hold its next meeting. The Fed, though, has been very clear about its intent to continue raising interest rates until it is sure that inflation is cooling. The Fed has raised its benchmark rate six times since March, driving it to a range of 3.75% to 4%, the highest in 15 years.
ECONOMIC NEWS: Institute for Supply Management said its manufacturing PMI slipped to 49.0 in November from 50.2 in October, with a reading below 50 indicating a contraction. The ISM survey's forward-looking new orders sub-index dropped to 47.2, remaining in contraction territory for a third straight month.
Meanwhile, a separate report released by the Labor Department showed first-time claims for U.S. unemployment benefits fell to 225,000, a decrease of 16,000 from the previous week's revised level of 241,000.
The Commerce Department also released a report showing personal income climbed by 0.7% in October after rising by 0.4% in September. The report said personal spending also advanced by 0.8% in October after climbing by 0.6% in September.
Among Indian ADR, HDFC Bank fell 1.5% to $69.55, Dr Reddy's Labs dropped 0.3% to $56.12, Tata Motors sank 1.8% to $26.81, ICICI Bank slid 2.2% to $23.20, and Azure Power Global fell 8.6% to $5.22. INFOSYS was up 0.8% at $20.51, WNS Holdings rose 0.1% to $84.43, and Wipro was up 0.6% to $5.15.
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