US STOCKS-S&P 500, Dow retreat after rally; Nasdaq gains further

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* Macy's gains as reopened stores perform better than
expected
* Fed's two-day policy meeting kicks off
* Broad pullback led by cyclical stocks
* Nasdaq at record high for third session
* Indexes: Dow down 0.58%, S&P fell 0.58%, Nasdaq up 0.26%

(Adds commentary, details; updates prices)
By Medha Singh and Devik Jain
June 9 (Reuters) - Wall Street's S&P 500 and Dow Jones
indexes fell on Tuesday while the tech-heavy Nasdaq hit a record
high for the third straight session as investors eyed this
week's Federal Reserve meeting for signs on how it views a
restarting economy.
The S&P 1500 airlines index .SPCOMAIR tumbled 6.8%, while
cruise operators Carnival Corp CCL.N and Norwegian Cruise Line
Holdings Ltd NCLH.N fell between 6.7% and 6.2% after leading
the recent recovery in stock markets.
The Nasdaq .IXIC became the first of Wall Street's main
indexes to confirm a new bull market after hitting a low on
March 23. The rally in U.S. stocks accelerated last week after
strikingly upbeat May jobs data strengthened views the worst of
the economic fallout from the pandemic was over.
The benchmark S&P 500 .SPX is about 5% below its own
all-time high, having climbed nearly 46% since its pandemic low
on March 23.
"We've gone really far in a short period of time. I would
not be surprised to see the market sort of trend sideways within
the next week or two," said Tim Chubb, chief investment officer
at Girard in West Chester, Pennsylvania.
While no major policy announcements are expected when the
U.S. central bank wraps up its two-day meeting on Wednesday,
investors will keep a close watch on its remarks on the health
of the economy.
The benchmark U.S. yield curve US2US10=TWEB - an indicator
of economic expansion - has widened to its steepest level since
March as U.S. data improved. Investors will also keep an eye out
on whether the Fed will step in to flatten the yield curve.
"Everyone will really be looking for the Fed's continued
commitment to support financial markets as well as the economy
with low interest rates and stimulus. And what they plan on
doing with the size of the balance sheet," Girard's Chubb said.
At 11:08 a.m. ET, the Dow Jones Industrial Average .DJI
was down 161.01 points, or 0.58%, at 27,411.43, the S&P 500
.SPX was down 18.70 points, or 0.58%, at 3,213.69. The Nasdaq
Composite .IXIC was up 25.66 points, or 0.26%, at 9,950.41.
Nine of the 11 S&P sectors were in the red with
interest-rate sensitive financials .SPSY weighing the most on
the benchmark index. Technology .SPLRCT and communication
services .SPLRCS stocks, which had lost ground recently,
climbed higher on Monday.
In a bright spot, Tiffany & Co TIF.N edged 2.1% higher as
the luxury jeweler said it had amended certain of its debt
agreements in order to have sufficient liquidity to navigate the
virus outbreak as it posted a 43% slump in quarterly sales.
Declining issues outnumbered advancers for a 4.15-to-1 ratio
on the NYSE and for a 2.50-to-1 ratio on the Nasdaq.
The S&P index recorded five new 52-week highs and no new
lows, while the Nasdaq recorded 29 new highs and no new lows.