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PCE rises 2.3% in October on annual basis

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Dell, HP fall after downbeat quarterly forecasts

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Q3 GDP unrevised at 2.8%; weekly jobless claims at 213,000

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Indexes down: Dow 0.09%, S&P 500 0.48%, Nasdaq 1.06%

(Updates for mid-session trading)

By Johann M Cherian and Purvi Agarwal

Nov 27 (Reuters) -

Wall Street's main indexes fell on Wednesday, with the

Nasdaq leading declines as technology stocks slumped ahead of

the Thanksgiving holiday, while investors focused on the Federal

Reserve's next move following an in-line inflation reading.

Data showed

consumer spending increased solidly

in October, suggesting the economy maintained its strong

pace of growth early in the fourth quarter, but progress on

lowering inflation appears to have stalled in the past months.

Traders added to bets the Fed will lower borrowing costs

by 25 basis points at its December meeting, according to CME's

FedWatch. However, they anticipate the central bank leaving

rates unchanged at its January and March meetings.

At 11:57 a.m. the Dow Jones Industrial Average fell

39.26 points, or 0.09%, to 44,821.05, the S&P 500 lost

29.12 points, or 0.48%, to 5,992.51 and the Nasdaq Composite

lost 203.28 points, or 1.06%, to 18,972.30.

Dell and HP fell 10.5% and 10.1%,

respectively, after downbeat quarterly forecasts and weighed on

the Information Technology sector, which led sectoral

declines and lost 2%.

The sentiment spread to megacaps such as Nvidia ( NVDA )

and Microsoft ( MSFT ), which dropped 3.5% and 1% respectively,

while the Philadelphia SE Semiconductor Index slid 3.2%

to hit a more than two-month low.

The Russell 2000 index, which hit a record high

earlier in the week, eked out a 0.1% gain.

Investors also assessed data earlier in the day which

showed the economy

grew

at a solid clip in the third quarter, while weekly jobless

claims

fell

again last week, leaving the door open for another

interest-rate cut from the Federal Reserve in December.

"Inflation has proven to be a little stickier than the

Fed would have liked, which may give them pause with respect to

cutting rates," said Scott Welch, chief investment officer at

Certuity.

"There are questions around the effects of Trump's

stated tariff policy, which, if implemented could be pretty

inflationary and so the Fed is going to have to balance itself

between the economic data and the incoming administration's

policy agenda."

Minutes from the Fed's November meeting, released on

Tuesday, showed policymakers were uncertain about the outlook

for interest-rate cuts and how much the current rates were

restricting the economy.

Concerns include U.S. President-elect Donald Trump's

proposed tax cuts and tariff policies, including his latest

stance on imports from Mexico, Canada and China, which could

push up prices, spark a trade war and weigh on growth globally.

The benchmark S&P 500 is on track for its biggest one-month

rise in a year and its sixth month of gains out of seven, as

markets price in the probability of Trump's policies benefiting

local businesses and the overall economy.

Among others, Workday lost 7.7% after forecasting

fourth-quarter subscription revenue below expectations, hit by

weaker client spending on its human capital management software.

Volumes are expected to thin out ahead of Thursday's

Thanksgiving holiday.

Advancing issues outnumbered decliners by a 2.09-to-1 ratio

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

The S&P 500 posted 76 new 52-week highs and no new lows,

while the Nasdaq Composite recorded 110 new highs and 44 new

lows.