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United Airlines gains on upbeat Q2 profit forecast

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Travelers falls after Q1 profit miss

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Fed's Beige Book shows slight expansion in economic

activity

(Updated at 4:00 p.m. ET/ 2000 GMT)

By Chuck Mikolajczak

NEW YORK, April 17 (Reuters) -

U.S. stocks fell in choppy trading on Wednesday as investors

assessed the Federal Reserve's interest rate stance and a batch

of soft earnings early in the financial reporting season.

Travelers tumbled as one of the biggest drags on the

S&P 500 and largest on the Dow Industrials after the insurance

giant missed Wall Street expectations for first-quarter profit.

Also weighing on the benchmark S&P index after

quarterly results were

Prologis ( PLD )

, with the warehouse-focused real estate investment

trust dropping, and Abbott Laboratories ( ABT ), which fell

after topping quarterly estimates but disappointing on its

annual forecast.

After a rally in the last two months of 2023 that

extended into the first quarter, equities have struggled with

the S&P 500 registering its fourth straight session of declines.

The index is on pace for its third straight weekly loss as

investors have dialed back expectations for the timing and size

of the Fed's rate cuts.

On Tuesday, U.S. central bank officials including Fed

Chair Jerome Powell backed away from providing guidance on when

rates may be cut, saying instead that monetary policy needs to

be restrictive for longer.

"The markets are dealing with a couple things - inflation is

hotter than most expect, rate cut expectations are coming down

and we've had a ramp higher in geopolitical tensions,

particularly out of the Middle East," said Anthony Saglimbene,

chief market strategist at Ameriprise Financial in Troy,

Michigan.

"It's just an excuse for traders to kind of move to the

sidelines and markets to kind of take a breath after a really,

really strong five months of gains."

According to preliminary data, the S&P 500 lost 29.80

points, or 0.59%, to end at 5,021.61 points, while the Nasdaq

Composite lost 183.22 points, or 1.15%, to 15,682.03.

The Dow Jones Industrial Average fell 59.19 points, or

0.16%, to 37,739.78.

The four-session S&P 500 sell-off is the longest in just

over four months, matching a four-day run of declines ended on

Jan. 4.

Fed Board Governor Michelle Bowman and Cleveland Fed

President Loretta Mester are scheduled to speak later in the

day.

The Fed's Beige Book survey of economic activity showed a

slight expansion from late February through early April and

companies feared that progress in lowering inflation would

stall.

After the market began to largely price in a June cut

from the Fed earlier this year, expectations for a cut of at

least 25 basis points have shriveled to 16.8%, and for a July

cut to 46%, CME's FedWatch Tool showed.

Stocks pared losses as U.S. Treasury yields eased further

from the previous day's multi-month highs following a strong

auction of 20-year bonds, with the 10-year note

last around 4.59%.

Among gainers, United Airlines surged after it

forecast stronger-than-expected current-quarter numbers, helping

to boost the NYSE Arca airline index.

"This coming earnings season is one of the most critical

earnings seasons we've had over the last couple quarters," said

Saglimbene.

JB Hunt Transport Services slumped after the

trucking firm missed Wall Street estimates for first-quarter

results.

U.S. Bancorp ( USB ) dropped after the lender cut its

forecast for full-year interest income and reported a 22% fall

in first-quarter profit.