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Intel ( INTC ) down after revealing deepening losses at chip-making

unit

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Ulta Beauty ( ULTA ) drops as CEO warns of sluggish Q1 demand

(Updates to 1600 ET)

By Chibuike Oguh

NEW YORK, April 3 (Reuters) - The S&P 500 and Nasdaq

ended slightly up on Wednesday after data showing the U.S.

services industry growth slowed further in March, while comments

by Federal Reserve Chair Jerome Powell that focused on the need

for more debate and data before interest rates are cut limited

the advance.

Most of the major S&P 500 sectors advanced, led by

materials and energy.

Powell reaffirmed in a speech on Wednesday that the Fed will

stick to its wait-and-see approach as it considers when to start

cutting rates given the continued strength of the U.S. economy

and recent higher-than-expected inflation data.

Earlier on Wednesday, data from the Institute for Supply

Management showed that non-manufacturing PMI declined for the

second straight month to 51.4 in March, down from 52.6 in

February, and weaker than analysts had expected, according to a

Reuters poll.

A reading above 50 indicates growth in the services

industry, which accounts for more than two-thirds of the

economy, and the data still indicates the U.S. economy continues

to expand, though at a moderate pace.

"It all has to do with the Fed and market expectations for a

rate cut being pushed off. I think that's really what is

weighing on the market here and has been for at least a couple

of days," said Tim Ghriskey, senior portfolio strategist at

Ingalls & Snyder in New York.

According to preliminary data, the S&P 500

gained 7.31 points, or 0.14%, to end at 5,213.12 points,

while the Nasdaq Composite gained 37.27 points, or

0.23%, to 16,277.46. The Dow Jones Industrial Average

fell 34.39 points, or 0.09%, to 39,135.85.

Traders were pricing in a 57% chance the Fed will cut

interest rates by 25 basis points in June, according to

CMEGroup's FedWatch tool, down from about 64% a week ago.

In separate comments to CNBC on Wednesday, Atlanta Fed

President Raphael Bostic said rates should likely not be reduced

until the fourth quarter of this year.

"There's this kind of yin and yang data scenario where you

have some strong data that has some good-news-is-bad-news feel

to it, meaning that what's good news for the economy is bad news

for potential policy path," said James St. Aubin, chief

investment officer at Sierra Investment Management in

California.

Among decliners, Ulta Beauty ( ULTA ) dropped after the

beauty retailer gave downbeat forecast at an industry

conference. Shares of e.l.f. Beauty and Coty ( COTY )

also fell.

Also, Intel ( INTC ) shares dropped after the chipmaker

disclosed $7 billion in operating losses for its foundry

business in 2023, steeper than the $5.2 billion reported the

year before.