Stocks slip as interest rate uncertainty, earnings weigh
United Airlines gains on upbeat Q2 profit forecast
Travelers falls after Q1 profit miss
Fed's Beige Book shows slight expansion in economic activity
Updated at 4:00 p.m. ET/ 2000 GMT
By Chuck Mikolajczak
NEW YORK, April 17 (Reuters) - U.S. stocks fell in choppy trading on Wednesday as investors assessed the Federal Reserve's interest rate stance and a batch of soft earnings early in the financial reporting season.
Travelers TRV.N tumbled as one of the biggest drags on the S&P 500 and largest on the Dow Industrials after the insurance giantmissed Wall Street expectations for first-quarter profit.
Also weighing on the benchmark S&P index .SPX after quarterly results were Prologis PLD.N, with the warehouse-focused real estate investment trust dropping, andAbbott Laboratories ABT.N, which fell aftertopping quarterly estimates but disappointing onits annual forecast.
After a rally in the last two months of 2023 that extended into the first quarter, equities have struggled with the S&P 500 registering its fourth straight session of declines. The index is on pace for its third straight weekly loss as investors have dialed back expectations for the timing and size of the Fed's rate cuts.
On Tuesday, U.S. central bank officials including Fed Chair Jerome Powellbacked away from providing guidance on when rates may be cut, saying instead that monetary policy needs to be restrictive for longer.
"The markets are dealing with a couple things - inflation is hotter than most expect, rate cut expectations are coming down and we've had a ramp higher in geopolitical tensions, particularly out of the Middle East," said Anthony Saglimbene, chief market strategist at Ameriprise Financial in Troy, Michigan.
"It's just an excuse for traders to kind of move to the sidelines and markets to kind of take a breath after a really, really strong five months of gains."
According to preliminary data, the S&P 500 .SPX lost 29.80 points, or 0.59%, to end at 5,021.61 points, while the Nasdaq Composite .IXIC lost 183.22 points, or 1.15%, to 15,682.03. The Dow Jones Industrial Average .DJI fell 59.19 points, or 0.16%, to 37,739.78.
The four-session S&P 500 sell-off is the longest in just over four months, matching a four-day run of declines ended on Jan. 4.
Fed Board Governor Michelle Bowman and Cleveland Fed President Loretta Mester are scheduled to speak later in the day.
The Fed's Beige Book survey of economic activityshowed a slight expansion from late February through early April and companies feared that progress in lowering inflation would stall.
After the market began to largely price in a June cut from the Fed earlier this year, expectations for a cut of at least 25 basis points have shriveled to 16.8%, and for a July cut to 46%,CME's FedWatch Tool showed.
Stocks pared losses as U.S. Treasury yieldseased further fromthe previous day's multi-month highs following a strong auction of 20-year bonds US20YT=RR, with the 10-year note US10YT=RR last around 4.59%.
Among gainers,United Airlines UAL.O surgedafter it forecast stronger-than-expected current-quarter numbers, helping to boost the NYSE Arca airline index .XAL.
"This coming earnings season is one of the most critical earnings seasons we've had over the last couple quarters," said Saglimbene.
JB Hunt Transport Services JBHT.O slumpedafter the trucking firm missed Wall Street estimates for first-quarter results.
U.S. Bancorp USB.N droppedafter the lender cut its forecast for full-year interest income and reported a 22% fall in first-quarter profit.
Travelers Companies earnings https://reut.rs/49EBkUK
Reporting by Chuck Mikolajczak; Editing by Richard Chang
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