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Palo Alto rises on upbeat forecast

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Eli Lilly ( LLY ) rises as weight-loss drug cuts diabetes risk in

trial

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Labor Department to issue preliminary data revisions on

Wednesday

(Updates to market close)

By Stephen Culp

NEW YORK, Aug 20 (Reuters) - U.S. stocks closed slightly

lower on Tuesday, breaking their recent winning streak amid few

market-moving catalysts ahead of the Jackson Hole Economic

Symposium, set to get under way on Thursday.

All three major U.S. stock indexes edged down, bringing an

end to a multi-session rally in which the equities market

bounced back from a steep sell-off driven by recession fears.

"Last week was the best week of the year for stocks, which

begs the question whether the rally will continue," said Chuck

Carlson, chief executive officer at Horizon Investment Services

in Hammond, Indiana.

"But I don't think today is indicative of a trend change,"

he added. "Investors are taking a pause and they're sleepy now

after feasting for the last couple weeks."

The eight days of consecutive daily gains were the

longest winning streaks for the S&P 500 and the Nasdaq since

November and December, respectively.

On Thursday, representatives from central banks around the

globe are expected to converge in Jackson Hole, Wyoming, for

their annual Economic Symposium, at which U.S. Federal Reserve

Chair Jerome Powell is expected to deliver remarks on Friday.

Powell's speech will be parsed by market participants for

hints regarding the number and timing of expected policy rate

cuts this year and next.

"The question is, is the rate cut going to be 25 or 50 basis

points, and I think that's where a lot of the reading between

the lines is going to happen, trying to see how aggressive that

first cut is going to be," Carlson said.

Financial markets are currently pricing in a 71.5%

likelihood of a 25 basis-point reduction of the Fed funds target

rate at the conclusion of the Federal Open Market Committee

meeting in September, with a 28.5% chance of a super-sized cut

of 50 basis points, according to CME's FedWatch tool.

On Wednesday, the Labor Department is expected to release

preliminary benchmark revisions to its employment data for the

12 months through March. A significant downward revision to the

data could potentially affect the data-dependent Fed's policy

path.

The Democratic National Convention in Chicago entered its

second day on Tuesday as election-year tensions potentially

exacerbate market swings at a time when the light volume typical

of late summer trading can trigger market volatility.

According to preliminary data, the S&P 500 lost 10.97

points, or 0.20%, to end at 5,597.28 points, while the Nasdaq

Composite lost 61.79 points, or 0.35%, to 17,814.98. The

Dow Jones Industrial Average fell 62.02 points, or 0.16%,

to 40,834.51.

Eli Lilly's ( LLY ) weight-loss drug Zepbound was shown to

drastically cut the risk of developing Type 2 diabetes in

pre-diabetic adults, sending the drugmaker's shares higher.

Cybersecurity firm Palo Alto Networks ( PANW ) jumped after

its fiscal 2025 revenue and profit forecasts beat analyst

estimates.

Boeing's ( BA ) shares slid in the wake of the U.S. Federal

Aviation Administration's announcement that it was adopting an

airworthiness directive for the planemaker's 787 Dreamliners.