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September CPI data higher than expected

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Delta Air Lines ( DAL ) down after Q3 results

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Energy stocks track oil prices higher

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Banks to kick off Q3 earnings season on Friday

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Indexes: Dow down 0.08%, S&P 500 flat, Nasdaq up 0.18%

(Updated at 12:07 pm ET/1607 GMT)

By Lisa Pauline Mattackal and Pranav Kashyap

Oct 10 (Reuters) -

Wall Street's main indexes struggled for direction on

Thursday, but pared some early losses after a

hotter-than-expected inflation reading kept expectations for a

25-basis-point rate cut by the Federal Reserve in November

alive.

The closely watched

Consumer Price Index

rose 0.2% on a monthly basis in September and 2.4% on an

annual basis, with both figures being slightly higher than

estimated by economists polled by Reuters.

The core figure, which excludes volatile food and energy

prices, rose 3.3% year-over-year, versus an estimate of 3.2%.

The Dow Jones Industrial Average fell 33.06

points, or 0.08%, to 42,478.58, the S&P 500 gained 1.29

points, or 0.02%, to 5,793.30 and the Nasdaq Composite

gained 33.23 points, or 0.18%, to 18,324.84.

The Russell 2000, which tracks economically

sensitive small-cap stocks, dipped 0.8%%.

Rate-sensitive sectors fell, with Real Estate

losing 0.7%, while Energy stocks outperformed other

sectors and was up 1%, as oil prices jumped.

A 0.2% gain in Technology stocks, notably a 1.7%

rise in chip bellwether Nvidia ( NVDA ), helped the tech-heavy

Nasdaq Composite outperform the other two indexes.

After the inflation data was released, traders firmed

bets on a 25-bps cut in November at 89%, according to CME's

FedWatch.

"What you're seeing here is a bounce in prices that

could push another rate cut back - but we got the other side of

the coin, which was a little warmer unemployment number as

well," said Brian Mulberry, portfolio manager at Zacks

Investment Management.

Jobless claims

also rose to 258,000 for the week ending Oct. 5, versus an

estimate of 230,000.

Meanwhile, Delta Air Lines ( DAL ) lost 0.6%, paring

some earlier losses after forecasting quarterly revenue below

expectations in anticipation of slower travel spending.

Other airlines also lost ground, with American Airlines ( AAL )

losing 1%.

Equity market performance has been largely led by

expectations for easing monetary policy, with traders now

scrutinizing how much further the U.S. central bank will lower

borrowing costs this year.

Among other single movers, shares of Pfizer ( PFE ) fell

2.3% as former executives distanced themselves from activist

investor Starboard's campaign against the drugmaker.

Both the S&P 500 and the Dow notched up record

closing highs on Wednesday.

"There's going to be a lot of volatility between now and the

end of the year... any wobble in the labor (market) or

bounceback in inflation will be a real concern," Mulberry said.

The start of the third-quarter earnings season is also

in focus, with major banks scheduled to report results on

Friday.

The third-quarter earnings growth rate for the S&P 500

is estimated at 5% year-over-year, according to estimates

compiled by LSEG.

Chicago Fed President Austan Goolsbee said he sees "gradual"

rate cuts over the next year-and-a-half, while the New York

Fed's John Williams said he still sees rate reductions ahead.

Investors also monitored the impact from Hurricane Milton,

which made landfall on Florida's west coast late on Wednesday.

Declining issues outnumbered advancers by a 1.43-to-1

ratio on the NYSE, and by a 1.68-to-1 ratio on the Nasdaq.

The S&P 500 posted 22 new 52-week highs and two new

lows, while the Nasdaq Composite recorded 45 new highs and 122

new lows.