* Apple falls on downgrade; weighs on tech
* Boeing slips as Saudi airline dumps MAX order
* Fed Chair Powell’s semi-annual testimony on July 10-11
* Indexes down: Dow 0.48%, S&P 0.50%, Nasdaq 0.79% (Changes comment, adds details, updates prices)
By Medha Singh and Uday Sampath Kumar
July 8 (Reuters) - U.S. stocks fell on Monday, pressured by a more than 2% drop in shares of Apple Inc and as investors toned down expectations of an aggressive interest rate cut by the Federal Reserve later this month.
A surprisingly strong U.S. jobs data on Friday has forced traders to temper hopes of a sharp rate cut at the central bank’s July 30-31 policy meeting, even as a reduction is still expected.
Bets of a 50 basis point cut now hover around 7%, down from about 20% a week ago, according to CME Group’s FedWatch program.
People are reducing their expectations of a Fed rate cut after getting back from a mini vacation last week, said Robert Pavlik, chief investment strategist and senior portfolio manager at SlateStone Wealth LLC in New York, referring to last week’s holiday shortened week on account of Independence Day.
Investors might get an opportunity to gauge near-term monetary policy thinking during Fed Chairman Jerome Powell’s semi-annual testimony to the U.S. Congress on July 10-11.
However, Pavlik does not expect Powell to give too much away at the hearing.
Also on tap is the central bank’s June meeting minutes, scheduled for release on Wednesday.
At 11:00 a.m. ET, the Dow Jones Industrial Average was down 129.29 points, or 0.48%, at 26,792.83, and the S&P 500 was down 14.84 points, or 0.50%, at 2,975.57. The Nasdaq Composite was down 64.24 points, or 0.79%, at 8,097.55.
Apple Inc fell and was the biggest drag on all the three main Wall Street indexes. Rosenblatt Securities downgraded the iPhone maker’s shares to “sell” from “neutral”, and said it expected the company to face “fundamental deterioration” in the next six to twelve months.
The drop in Apple shares led to a 0.91% fall in the technology sector, the steepest among eight of the 11 major S&P sectors trading lower.
The major sectors trading higher were energy, up on higher oil prices, consumer discretionary and real estate.
Boeing Co’s shares fell 1.4% after Saudi Arabian budget airline flyadeal said it would not proceed with a provisional $5.9 billion order for the planemaker’s grounded 737 MAX aircraft, instead opting for a fleet of Airbus A320 jets.
Symantec Corp rose 3.4% after Jefferies said the cybersecurity firm is a “logical financial acquisition” amid reports of Broadcom Inc in advanced talks for a deal.
Declining issues outnumbered advancers for a 1.72-to-1 ratio on the NYSE and for a 2.15-to-1 ratio on the Nasdaq.
The S&P index recorded 14 new 52-week highs and no new low, while the Nasdaq recorded 22 new highs and 30 new lows. (Reporting by Medha Singh and Uday Sampath in Bengaluru; Editing by Sriraj Kalluvila)