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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: Dow up 0.23%, S&P 500 down 0.21%, Nasdaq off

0.66%

(Updates with inflation data)

By Johann M Cherian and Purvi Agarwal

Nov 27 (Reuters) -

The S&P 500 and the Nasdaq edged lower on Wednesday, weighed

by a decline in technology stocks, while investors focused on

the Federal Reserve's next move following an in-line inflation

reading.

A Commerce Department report showed the Personal

Consumption Expenditure index, the Fed's preferred inflation

gauge, rose 2.3% in October on an annual basis, in line with

economists' estimates. However, it remained above the central

bank's 2% target.

Traders still expect a 66% chance the Fed will lower

borrowing costs by 25 basis points at its December meeting,

according to CME's FedWatch.

At 10:15 a.m. the Dow Jones Industrial Average

rose 105.77 points, or 0.23%, to 44,964.85, the S&P 500

lost 12.62 points, or 0.21%, to 6,009.01 and the Nasdaq

Composite lost 127.19 points, or 0.66%, to 19,048.39.

Most megacaps fell, with Nvidia ( NVDA ) down 2.5%,

while Microsoft ( MSFT ) lost 0.6%. Losses in these stocks

brought the Information Technology sector down 1.1%,

as yields on shorter-dated Treasury bonds recouped some losses

after the PCE data.

Dell and HP, which fell 10.5% and 10.1%,

respectively, after downbeat quarterly forecasts, added to

declines and were the top losers on the benchmark index.

The Russell 2000 index was up 0.7%, while the

blue-chip Dow was buoyed by gains in healthcare and financial

stocks.

Data earlier in the day showed the economy

grew

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

claims

fell

again last week, keeping the door open to 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.

Workday lost 9.6% after forecasting fourth-quarter

subscription revenue below expectations, hit by weaker client

spending on its human capital management software.

Advancing issues outnumbered decliners by a 2.88-to-1 ratio

on the NYSE, and by a 1.7-to-1 ratio on the Nasdaq.

The S&P 500 posted 74 new 52-week highs and no new lows,

while the Nasdaq Composite recorded 99 new highs and 37 new

lows.