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US STOCKS-Wall Street dips with Fed policy announcement on tap

·3 min read
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* FedEx jumps after lifting quarterly dividend by more than 50%

* Oracle rises as sales, profit top estimates on cloud boom

* Continental Resources jumps on buyout proposal from founder (Updates to mid-afternoon, changes byline)

By Chuck Mikolajczak

NEW YORK, June 14 (Reuters) - The S&P 500 ended lower on Tuesday as the index was unable to bounce from a sharp sell-off in the prior session with a key policy statement from the Federal Reserve on deck that will reveal how aggressive the central bank's policy path will be.

Analyst expectations had largely been predicting the Fed would hike by 50 basis points at the conclusion of its meeting on Wednesday.

However, views that a 75 basis point hike was on the table have been growing after Friday's higher-than-expected consumer price index (CPI) data for May. In addition, a report from the Wall Street Journal on Monday and forecasts from several banks, including JP Morgan and Goldman Sachs, signaling a 75 basis point hike have bolstered that belief.

Traders are currently pricing in a more than 90% chance of a 75 basis point hike, up from 3.9% a week ago, according to CME's FedWatch Tool https://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html?redirect=/trading/interest-rates/fed-funds.html.

Data on Wednesday showed that the producer prices index (PPI), while slightly less than expectations on a year-over-year basis for May, remained high as gasoline prices jumped.

"Ultimately, even though we are seeing even more red and more negative pressure here, in general today we believe is really a wait-and-see day," said Greg Bassuk, CEO at AXS Investments in Port Chester, New York.

"The PPI numbers today put to bed any questions around the extent of rising prices and inflation - the big question is going to be how aggressive the Fed is going to be literally this week - not so much even projecting out, but how much they are going to take the bull by the horns this week and really try to make some moves that could ease recessionary fears."

According to preliminary data, the S&P 500 lost 13.82 points, or 0.37%, to end at 3,735.81 points, while the Nasdaq Composite gained 17.49 points, or 0.16%, to 10,826.72. The Dow Jones Industrial Average fell 144.73 points, or 0.47%, to 30,372.01.

The benchmark S&P 500 index is on track for its fifth straight daily decline, which would mark its longest losing streak since early January. Monday's declines put the index down more than 20% from its most recent record high, confirming a bear market began on Jan. 3, according to a commonly used definition.

Among individual stocks, swimming pool supplies distributor Pool Corp slumped after Jefferies cut its price target on the stock to $400 from $485.

FedEx Corp surged after raising its quarterly dividend by more than 50%, while Oracle Corp gained after posting upbeat quarterly results on demand for its cloud products.

Continental Resources Inc jumped after the shale producer received an all-cash buyout offer from its founder Harold Hamm, valuing the company at $25.41 billion.

(Reporting by Chuck Mikolajczak; Editing by Aurora Ellis)