US STOCKS-Wall St dragged down by Apple; hopes of sharp rate cut fade

* Apple falls on downgrade, weighs on tech
* Boeing slips as Saudi airline dumps MAX order
* Nine of the 11 S&P sectors lower
* Indexes down: Dow 0.50%, S&P 0.59%, Nasdaq 0.93%

(Updates to early afternoon)
By Medha Singh and Uday Sampath Kumar
July 8 (Reuters) - U.S. stocks fell on Monday, pressured by
a drop in Apple Inc and declines in healthcare stocks 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.
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.
Do not expect any big surprises to come out of Powell's
testimony, but any type of surprise on the inflation numbers
that come out later this week come move markets from current
levels, Chris Larkin, senior vice president, trading at E*TRADE
Financial Corp said.
Also on tap is the central bank's June meeting minutes,
scheduled for release on Wednesday.
Apple Inc AAPL.O fell 2% 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 led to a 0.89% fall in the technology
.SPLRCT sector. The healthcare sector .SPXHC dropped 1.08%
weighed down by President Donald Trump's recent statement about
an upcoming executive order that would lower prescription drug
prices.
The major sectors trading higher were energy .SPNY , up on
higher oil prices, and real estate .SPLRCR .
At 12:48 p.m. ET the Dow Jones Industrial Average .DJI was
down 135.93 points, or 0.50%, at 26,786.19, the S&P 500 .SPX
was down 17.66 points, or 0.59%, at 2,972.75 and the Nasdaq
Composite .IXIC was down 75.50 points, or 0.93%, at 8,086.29.
Investor attention is also expected to turn to the start of
the second-quarter earnings season next week. Profits for S&P
500 companies are expected to dip 0.1% year-over-year, according
to Refinitiv IBES data.
"The results for S&P 500 companies are expected to be
underwhelming ... investors are likely to look beyond the
uninspiring headline number," Jonathan Golub, chief U.S. equity
strategist at Credit Suisse said.
"Company-specific issues at several large tech companies and
Boeing are expected to detract from second-quarter results."
Boeing Co BA.N 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 SYMC.O rose 3.5% after Jefferies said the
cybersecurity firm is a "logical financial acquisition" amid
reports of Broadcom Inc AVGO.O in advanced talks for a deal.
Declining issues outnumbered advancers for a 1.92-to-1 ratio
on the NYSE and a 2.51-to-1 ratio on the Nasdaq.
The S&P index recorded 14 new 52-week highs and no new low,
while the Nasdaq recorded 33 new highs and 38 new lows.