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Most chip stocks advance, megacap stocks mixed

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AT&T down after reporting data leak

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Indexes down: Dow 0.7%, S&P 500 0.3%, Nasdaq 0.1%

(Updates to 1430 p.m. ET)

By Chibuike Oguh

NEW YORK, April 1 (Reuters) - U.S. stocks edged lower on

Monday, dragged down by investor worries over the timing of

interest rate cuts by the Federal Reserve after

stronger-than-expected manufacturing data pushed Treasury yields

higher.

The Institute for Supply Management (ISM) said its

manufacturing PMI increased to 50.3 last month, the highest and

first reading above 50 since September 2022, from 47.8 in

February. It suggested the manufacturing sector, which has been

battered by higher interest rates, was recovering.

"If the economy is still somewhat strong and now that

PMI data is starting to move up, that just suggests there could

be some upside pressure in yields," said Keith Lerner, chief

market strategist at Truist Wealth in Atlanta.

Benchmark 10-year and two-year Treasury yields jumped to

two-week peaks following the manufacturing data.

The Dow Jones Industrial Average fell 267.11

points, or 0.67%, to 39,540.26, the S&P 500 lost 15.11

points, or 0.29%, to 5,239.24 and the Nasdaq Composite

dropped 7.41 points, or 0.05%, to 16,372.04.

The U.S. rate futures market was pricing in a 57% chance of

a rate cut in June, down from about 64% a week ago, according to

the CME's FedWatch tool.

"We would prefer a stronger economy with less rate cuts than

a weaker economy with more rate cuts, but, on a short term

basis, the narrative has moved to about three rate cuts," Lerner

added.

The majority of S&P 500 sectors were lower, with the real

estate, healthcare, and utilities

among the worst hit. The energy sector gained along with

stronger crude oil prices.

The technology sector also was higher, and an

index of semiconductors was up 1.1%.

Declining issues outnumbered advancing ones on the NYSE

by a 1.90-to-1 ratio; on Nasdaq, a 1.78-to-1 ratio favored

decliners.

The S&P 500 posted 34 new 52-week highs and 1 new lows; the

Nasdaq Composite recorded 88 new highs and 64 new lows.