(Updates to US market close)

*

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

By Chuck Mikolajczak

NEW YORK, Sept 24 (Reuters) - U.S. stocks closed lower

for a second straight session 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 trajectory of rate cuts

from the central bank as it attempts to buttress an economy that

has shown signs of a flagging labor market without stoking

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."

According to preliminary data, the S&P 500 lost 19.78

points, or 0.30%, to end at 6,637.14 points, while the Nasdaq

Composite lost 77.10 points, or 0.34%, to 22,496.37. The

Dow Jones Industrial Average fell 178.22 points, or

0.38%, to 46,114.56.

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, at the height of the internet

boom.

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

sectors, as Freeport-McMoRan ( FCX ) plunged 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 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.

In company news, 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 also advanced. UBS also

upgraded the automaker to "buy" from "neutral."

Micron Technology ( MU ) ended lower after the memory chipmaker

reported quarterly results.

Oracle declined after Bloomberg News said the company

was looking to raise $15 billion in corporate bond sales.

Investors' attention will now shift to the personal

consumption expenditures data, the Fed's preferred inflation

gauge, due for release later this week.

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