US STOCKS-Wall Street falls as Amazon, chipmakers weigh
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* Chip stocks tumble after Citi sounds alarm on Intel
* Altria falls after report of MS downgrade
* Indexes down: Dow 0.65%, S&P 0.79%, Nasdaq 0.54% (Adds comment, details; updates prices)
By Devik Jain and Mehnaz Yasmin
June 8 (Reuters) - U.S. stock indexes fell on Wednesday as Amazon.com declined and chipmakers came under pressure after a bearish brokerage report on Intel, while higher oil prices deepened worries about global inflation.
Nine of the 11 major S&P sectors were trading lower, with economy-sensitive materials and financials falling 1.6% each. Banks shed 1.9%.
Intel Corp slid 5% as Citi Research warned the chipmaker could pre-announce weaker-than-expected earnings for the second quarter. The Philadelphia Semiconductor SE index lost 2.5%.
Shares of Microsoft Corp and Amazon.com dipped 0.5% and 1.3%, respectively, as rate-sensitive growth stocks took a hit from elevated Treasury yields.
The energy sector was among the few gainers with a rise of 0.8%, thanks to a jump in Brent crude prices to above $123 a barrel. The sector has soared 66.7% so far this year.
"Given the fact that we are continuing to see gas prices increase makes me think that we still have very high inflationary pressures," said JJ Kinahan, chief market strategist at online brokerage firm tastytrade Inc.
"So that and how the Federal Reserve is going to react to them or how people think the Fed will react to them is still the main game in town. Everybody is very anxious to see the CPI (consumer price index) number on Friday."
A hot reading on inflation would likely spook markets already worried about how the Fed will balance growth and inflation as it withdraws its pandemic-era policy support to the economy.
Money markets are expecting a 50-basis points rate increase by the U.S. central bank next week, followed by a similar raise in July and possibly in September too.
"Equity markets would rally at any hint of a pause in the expected rate-hike cycle," Scott Wren, senior global market strategist at Wells Fargo Investment Institute, said in a note.
Resilient consumer spending and data suggesting inflation might have peaked have helped the S&P 500 gain 8.3% since May 20 after a decline of as much as 20.05% this year.
The benchmark index was last down 13.4% for the year, while the blue-chip Dow and the tech-heavy Nasdaq have lost 9.3% and 22.6%, respectively.
At 13:00 p.m. ET, the Dow Jones Industrial Average was down 217.18 points, or 0.65%, at 32,962.96, the S&P 500 was down 32.89 points, or 0.79%, at 4,127.79, and the Nasdaq Composite was down 65.27 points, or 0.54%, at 12,109.96.
Altria Group slid 6.9% after a report that Morgan Stanley cut the tobacco company's stock to an "underweight" rating on competition concerns.
The CBOE volatility index was last trading at 24.32 points, above its long-term average of about 20 points.
Declining issues outnumbered advancers for a 2.44-to-1 ratio on the NYSE and a 1.30-to-1 ratio on the Nasdaq.
The S&P index recorded three new 52-week highs and 29 new lows, while the Nasdaq recorded 31 new highs and 55 new lows. (Reporting by Devik Jain and Mehnaz Yasmin in Bengaluru; Editing by Arun Koyyur and Aditya Soni)
