(Updates to US midafternoon trading)

*

Freeport-McMoRan ( FCX ) tumbles after outlook; declares force

majeure

*

Lithium Americas soars after report Trump administration

mulling

stake

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Oracle dips after report it is looking to raise $15 bln in

bond

sales

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Indexes down: Dow 0.36%, S&P 500 0.42%, Nasdaq 0.5%

By Chuck Mikolajczak

NEW YORK, Sept 24 (Reuters) - U.S. stocks retreated on

Wednesday, as investors booked profits with indexes near record

levels after Federal Reserve Chair Jerome Powell flagged

potentially stretched stock prices and ahead of a reading on

inflation later in the week.

Investors are trying to gauge the path of rate cuts from the

central bank as it attempts to support an economy that has shown

signs of a flagging labor market and the possibility of rising

inflation.

With each of the three major indexes, along with the small-cap

Russell 2000, closing at record highs simultaneously for the

first time in years earlier this week, Powell said on Tuesday

that asset prices appeared fairly highly valued. As his

colleagues staked out arguments on both sides of the policy

divide, the Fed chair emphasized the tightrope the central bank

must walk in upcoming policy decisions.

To some analysts, the comments were reminiscent of those by

former Fed Chair Alan Greenspan, who said in a 1996 speech that

"irrational exuberance" had pushed up asset values.

Last week's Fed rate cut helped lift equities in September,

typically a weak month for stocks, with investors now banking on

further easing to keep the rally alive.

"With the S&P pricing in 23-24 times expected earnings and

expectations priced in to that multiple of about 15% annualized

earnings growth over the next five years, that sounds pretty

rich to me," said Ron Albahary, chief investment officer at LNW

in Philadelphia.

"So not that we're market timers at all, but the idea that

people might be using this, using the Fed's comments, Powell's

comments as just a reason to trim back a little bit makes sense

to me."

The Dow Jones Industrial Average fell 164.77 points,

or 0.36%, to 46,128.01, the S&P 500 lost 27.91 points, or

0.42%, to 6,629.32 and the Nasdaq Composite lost 112.89

points, or 0.50%, to 22,460.90.

Some valuation measures for stocks are at their highest

level since 2021, and a further climb would elevate them to

thresholds not seen in decades, since the height of the internet

boom.

Materials was the worst-performing of the S&P 500

sectors, as Freeport-McMoRan ( FCX ) plunged more than 15% after

it declared force majeure at its Grasberg mine in Indonesia and

said it is expecting consolidated sales to be lower for copper

and gold in the third quarter.

On the plus side, the S&P 500 energy index rose 1.6% as

the best performing sector, tracking higher crude prices, which

rose to a seven-week high after a surprise drop in U.S. weekly

crude inventories.

Data released on Wednesday showed the sales of freshly

constructed single-family U.S. homes unexpectedly

surged by 20.5% in August.

Lithium Americas' U.S.-listed shares nearly doubled

after Reuters reported on Tuesday that President Donald Trump's

administration was seeking an equity stake of up to 10% in the

company.

Talks are under way to discuss a government loan exceeding

$2.26 billion for the company's Thacker Pass lithium project

with General Motors ( GM ), which rose 1.6%. UBS also upgraded

the automaker to "buy" from "neutral."

Micron Technology ( MU ) shed 3% after the memory chipmaker

reported quarterly results.

Oracle declined 3% after Bloomberg News said the

company was looking to raise $15 billion in corporate bond

sales.

Investors will now focus on personal consumption

expenditures data, the Fed's preferred inflation gauge, due for

release later this week.

Declining issues outnumbered advancers by a 1.82-to-1 ratio

on the NYSE and by a 1.45-to-1 ratio on the Nasdaq.

The S&P 500 posted 21 new 52-week highs and eight new lows,

while the Nasdaq Composite recorded 80 new highs and 48 new

lows.