* Investors await Fed chair's speech on Friday
* Facebook falls on data policy changes, report of EU probe
* Home Depot rises after profit beat
* Indexes down: Dow -0.41%, S&P -0.62%, Nasdaq -0.52%
(Updates to late afternoon, changes byline, dateline to NEW
YORK)
By April Joyner
NEW YORK, Aug 20 (Reuters) - Financial shares led U.S.
stocks lower on Tuesday to end a three-day rally as investors
awaited comments from Federal Reserve Chair Jerome Powell at the
end of the week.
The S&P 500 financial index .SPSY dropped 1.2%, and the
group weighed most heavily on the benchmark index among its
major sectors, which were almost all in the red.
Only consumer discretionary shares .SPLRCD posted gains, a
modest 0.16% rise, as shares of Home Depot Inc (NYSE:HD) HD.N climbed
4.4%. The home improvement retailer's quarterly earnings,
reported before the market open, beat estimates. Shares of rival
Lowe's Companies Inc LOW.N also rose 3.4%. Prior to Tuesday's session, U.S. stocks had recovered most
of their losses from a steep sell-off on Wednesday, which was
triggered by a brief inversion of the yield curve between 2-year
and 10-year Treasuries, widely considered a harbinger of a
recession. Reports of global stimulus efforts in China and
Germany, along with the subsequent steepening of the yield
curve, helped assuage recession fears.
The S&P 500 is now 3.8% shy of its record closing high in
July after having fallen as much as 6.2% below that level.
With the major indexes having recovered much of last week's
losses, investors said they were now looking forward to Friday's
speech from the Fed's Powell at the Jackson Hole central
bankers' conference for more clues on the course of monetary
policy and interest rates.
"Everyone is waiting for Jackson Hole," said Jim Awad,
senior managing director at Clearstead Advisors in New York.
"It's a wait-and-see attitude until Friday."
"We just got back a loss of 800 points," he said, referring
to the Dow Jones Industrial Average's recovery from its decline
last Wednesday.
Hints on the U.S. central bank's plans may also be found in
minutes from the Fed's July policy meeting, which will be
released on Wednesday.
The Dow Jones Industrial Average .DJI fell 106.46 points,
or 0.41%, to 26,029.33, the S&P 500 .SPX lost 18.06 points, or
0.62%, to 2,905.59 and the Nasdaq Composite .IXIC dropped
41.59 points, or 0.52%, to 7,961.23.
Facebook Inc FB.O shares were the biggest drag on the S&P
500. They dropped 1.2% as the company said it was tweaking its
policies to allow users to see and control the data that other
websites and apps share with the social network to improve
targeted advertising. A Bloomberg report that its digital
currency Libra faces an anti-trust probe by the European Union
also weighed on Facebook shares. Shares of Netflix Inc NFLX.O fell 3.3% after Walt Disney (NYSE:DIS)
Co DIS.N announced its streaming service would launch in
Canada and the Netherlands on November. Disney shares edged up
0.2%. Medtronic (NYSE:MDT) Plc MDT.N shares rose 3.1%, among the biggest
percentage gains on the S&P 500, after the medical device maker
raised its full-year adjusted profit forecast. Declining issues outnumbered advancing ones on the NYSE by a
1.39-to-1 ratio; on Nasdaq, a 1.61-to-1 ratio favored decliners.
The S&P 500 posted 30 new 52-week highs and five new lows;
the Nasdaq Composite recorded 43 new highs and 76 new lows.