By Sinéad Carew and Purvi Agarwal
(Reuters) -Wall Street's main indexes edged lower on Tuesday as investors anxiously awaited key inflation reports that could influence the Federal Reserve's interest rate decision next week.
Among the S&P 500 's 11 major industry sectors, communication services, up 2.5%, was the biggest gainer with a strong boost from Google-parent Alphabet (NASDAQ: GOOGL ), whose shares rose 5.3% after it unveiled a new-generation chip.
The weakest sectors were rate-sensitive real estate, down 1.4%, and technology, down 1%. Tech was dragged down by a 7.7% drop in Oracle (NYSE: ORCL ) after the cloud computing company missed Wall Street estimates for second-quarter results.
A November reading of the Consumer Price Index, due on Wednesday, is among the last major reports ahead of the Fed's Dec. 17-18 meeting. Headline inflation is expected to have risen slightly in November to 2.7% from 2.6% in October. The Producer Price Index report will follow on Thursday.
"There's a little bit of wait-and-see in the market ahead of the CPI and PPI data this week," said Mona Mahajan, head of investment strategy at Edward Jones. "Markets want to see a number that won't be too disruptive to the Fed next week."
If the CPI comes in line with estimates, investors will expect an "all clear" for the Fed to lower rates by 25 basis points next week, she added.
Traders see a 86% chance for a cut next week, CME's FedWatch Tool showed. Bets had jumped after Friday's news of an uptick in unemployment along with a rebound in job growth, which had slowed in October.
However, bets indicate the U.S. central bank is expected to pause its easing cycle in January, as a host of Fed officials last week hinted at a slower pace of monetary policy easing on the back of a resilient economy.
As of 2:09 p.m. ET, the Dow Jones Industrial Average fell 42.00 points, or 0.09%, to 44,359.09. The S&P 500 lost 7.06 points, or 0.12%, at 6,045.79 and the Nasdaq Composite fell 4.16 points, or 0.02%, to 19,732.53.
Among individual stock movers, software firm MongoDB (NASDAQ: MDB ) slipped about 15% despite raising its forecast for annual results.
Shares in Walgreens Boots Alliance (NASDAQ: WBA ) rose 18% on news that it is in talks to sell itself to private equity firm Sycamore Partners.
Alaska Airlines jumped 12% as the carrier raised its fourth-quarter profit forecast, while Boeing (NYSE: BA ) added 5% after Reuters reported the planemaker restarted production of its 737 MAX jets last week.
Luxury homebuilder Toll Brothers (NYSE: TOL ) fell 6% after its quarterly results beat expectations but its current quarter forecasts disappointed.
Declining issues outnumbered advancers by a 1.36-to-1 ratio on the NYSE where there were 92 new highs and 32 new lows.
On the Nasdaq, 1,931 stocks rose and 2,285 fell as declining issues outnumbered advancers by a 1.18-to-1 ratio. The S&P 500 posted eight new 52-week highs and two new lows while the Nasdaq Composite recorded 80 new highs and 78 new lows.