* Fed President Jeffrey Lacker strikes hawkish note on rates
* Rate-sensitive sectors of S&P 500 drop the most
* Apple top influence on all three indexes
* Dow down 0.15 pct, S&P down 0.16 pct, Nasdaq up 0.05 pct
(Updates to early afternoon)
By Yashaswini Swamynathan
Oct 4 U.S. stocks see-sawed on Tuesday as
investors assessed the prospects of an interest rate hike in the
The markets lost some momentum after the International
Monetary Fund (IMF) lowered its growth forecast for the U.S.
economy to 1.6 percent from 2.2 percent this year and painted a
gloomy picture of the global economy.
Ten of the 11 major S&P 500 indexes were down, with the high
dividend-paying sectors, telecom services and
utilities, taking the biggest hit.
Financials rose 0.68 percent after Richmond Federal
Reserve President Jeffrey Lacker said he would have voted in
favor of a rate hike at the last policy meeting had he been able
to do so.
His view comes a day after Cleveland Fed president Loretta
Mester said the central bank should not delay a rate increase,
highlighting the growing pressure on Fed Chair Janet Yellen to
pull the trigger.
Traders have priced in a 63 percent chance of the Fed
raising interest rates in December, according to the CME Group's
Financials were also helped by the ebbing fears about the
health of Deutsche Bank, whose Frankfurt-listed stock
closed up 1.5 percent after major clients and rivals extended
support to the bank, which is negotiating with U.S. authorities
over a multi-billion dollar penalty.
Deutsche Bank's U.S.-listed stock was up 3 percent, while
shares of Bank of America, Citigroup and JPMorgan
"The market is in a position where it is sensitive to news.
So it is going to be a back-and-forth day, driven by various
news stories that come out," said Randy Frederick, managing
director of trading and derivatives at Charles Schwab in Austin,
At 12:22 p.m. ET (1622 GMT), the Dow Jones Industrial
Average was down 27.02 points, or 0.15 percent, at
The S&P 500 was down 3.38 points, or 0.16 percent, at
The Nasdaq Composite was up 2.77 points, or 0.05
percent, at 5,303.64.
Apple rose 0.7 percent and was the top influence on
the three major indexes. The iPhone maker extended the global
reach of Apple Pay by launching the software in Russia.
Sears surged 12 percent after Bloomberg reported
that the department store chain's Craftsman tool brand had
attracted multiple bidders.
Darden shares rose 4.6 percent to $64.15 in
premarket trading after the restaurant chain operator reported a
rise in first-quarter sales.
Declining issues outnumbered advancing ones on the NYSE by
1,749 to 1,130. On the Nasdaq, 1,383 issues fell and 1,325
The S&P 500 index showed 13 new 52-week highs and four new
lows, while the Nasdaq recorded 72 new highs and 19 new lows.
(Reporting by Yashaswini Swamynathan in Bengaluru; Editing by