*

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

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Indexes down: Dow 0.14%, S&P 500 0.17%, Nasdaq 0.26%

(Updates to 2:10 p.m. EDT)

By Stephen Culp

NEW YORK, Aug 20 (Reuters) - U.S. stocks broke their

recent rally on Tuesday, consolidating 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 were modestly lower,

setting a course to snap a multi-session rally in which the

equities market bounced back from a steep sell-off driven by

inflation fears.

"(The market is) taking a breather," said Joseph Sroka,

chief investment officer at NovaPoint in Atlanta. "It's nice to

have a calm day for once, and the market has recovered from a

bit of a shock to the system following the weak July jobs

report, which sparked concern that maybe the Fed missed the

boat, it was too slow to cut rates."

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.

A 1.2% drop in semiconductor stocks pulled the tech-laden

Nasdaq down the most.

On Thursday, representatives from central banks around the

globe are expected to converge in Jackson Hole 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.

"Jackson Hole speeches are traditionally optimistic, not to

the point where (Powell is) going to announce any policy

direction," Sroka added. "But maybe he will show some confidence

that if the data continues to move in the right direction, then

it would be appropriate to consider easing monetary policy."

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 Markets 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

its 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 enters 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.

At 2:10 p.m. EDT, the Dow Jones Industrial Average

fell 58.65 points, or 0.14%, to 40,837.88, the S&P 500

lost 9.51 points, or 0.17%, to 5,598.74 and the Nasdaq Composite

dropped 45.71 points, or 0.26%, to 17,831.06.

Among the 11 major sectors of the S&P 500, energy stocks

suffered the largest percentage drop, with healthcare

leading the gainers.

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 up 2.5%.

Cybersecurity firm Palo Alto Networks ( PANW ) jumped 8.9%

after its fiscal 2025 revenue and profit forecasts beat analyst

estimates.

Boeing's ( BA ) shares slid 4.2% in the wake if the U.S.

Federal Aviation Administration's announcement that it was

adopting an airworthiness directive for the planemaker's 787

Dreamliners following a sudden mid-air dive incident in March.

Declining issues outnumbered advancing ones on the NYSE by a

1.96-to-1 ratio; on Nasdaq, a 2.08-to-1 ratio favored decliners.

The S&P 500 posted 37 new 52-week highs and no new lows; the

Nasdaq Composite recorded 66 new highs and 65 new lows.