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Novavax ( NVAX ) drops 6% on cut to annual revenue forecast

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Honeywell ( HON ) jumps to record high as Elliott discloses stake

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Tesla ends 5-day rally with 6% drop

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Indexes down: Dow 0.86%, S&P 500 0.29%, Nasdaq 0.09%

(Updates with final prices, volume data)

By Sinéad Carew and Lisa Pauline Mattackal

Nov 12 (Reuters) - Wall Street's three major indexes

closed lower on Tuesday as investors booked some profits from a

post-election rally and waited anxiously for U.S. inflation data

due this week.

The indexes had rallied to record highs since the Nov. 5

U.S. election as investors bet on a boost to equities from

President-elect Donald Trump's proposed tax cuts and the

prospect of easier regulatory policies.

But investor enthusiasm dampened on Tuesday with concerns

around whether the next U.S. administration's policies would

exacerbate inflation. European shares lost 2% as European

Central Bank policymakers warned that increased tariffs from

Trump would hamper global growth.

Some of the stocks expected to perform well under Trump gave

back gains with shares in electric car maker Tesla

closing down 6% on Tuesday after rising nearly 40% since

Election Day.

The small-cap Russell 2000 index fell 1.8% after

closing at a three-year high on Monday. And rising U.S. Treasury

yields hurt equities as bond investors priced in Trump policies.

"The 10-year Treasury yield is kind of creating a headwind

against the equity rally. There's sort of these conflicting

signals where investors are celebrating all of these growth

initiatives but the bond market is pushing back," said Jack

Ablin, chief investment officer at Cresset Capital.

"The problem is between tariffs, tax cuts and immigration

restrictions, it really is pushing on creating inflation

pressure that the bond market can't ignore."

Russell Price, chief economist at Ameriprise Financial, said

the decline in stocks overseas added some pressure to U.S.

stocks, along with profit-taking ahead of inflation data.

"When we opened up already experiencing some downside with

the very strong run that we've had, investors tend to look to

take some profits just in case stocks continue to slide," Price

said.

On investors' radar is Wednesday's consumer price inflation

data, followed by producer prices inflation and retail sales

data later this week, as these could provide clues about the

U.S. Federal Reserve's policy path going forward.

The data presents a near-term risk to investments, said

Price. "It very likely is contributing to a little bit of the

downside that we're seeing today."

The Dow Jones Industrial Average fell 382.15 points,

or 0.86%, to 43,910.98, the S&P 500 lost 17.36 points, or

0.29%, to 5,983.99 and the Nasdaq Composite lost 17.36

points, or 0.09%, to 19,281.40.

The Dow's biggest decliner was Amgen ( AMGN ), which closed

down more than 7% due to a late-session sell-off.

Brokerage Cantor Fitzgerald said Amgen's ( AMGN ) experimental

obesity drug MariTide showed a 4% loss in bone mineral density

in data that was published in February.

Among the S&P 500's 11 major industry sectors, materials

led declines with a 1.6% loss followed by healthcare

, which was dragged down by Amgen ( AMGN ).

The communications services index was the biggest

sector gainer, adding 0.5%.

Meanwhile Minneapolis Federal Reserve Bank President Neel

Kashkari said Tuesday afternoon that U.S. monetary policy is

"modestly restrictive," with short-term borrowing costs

continuing to slow inflation and the economy, but not by a lot.

Richmond Fed President Thomas Barkin had said earlier in the

day that the U.S. central bank is ready to respond if inflation

pressures rise or the job market weakens.

Biotech firm Novavax ( NVAX ) dropped 6% after cutting its

annual revenue forecast due to lower-than-expected sales of its

COVID-19 vaccine.

Honeywell ( HON ) hit a record high and closed up 3.8% after

activist investor Elliott Investment said it has built a stake

worth more than $5 billion in the industrial conglomerate.

Declining issues outnumbered advancers by a 3.48-to-1 ratio

on the NYSE where there were 328 new highs and 101 new lows.

On the Nasdaq, 1,328 stocks rose and 3,012 fell as declining

issues outnumbered advancers by a 2.27-to-1 ratio. The S&P 500

posted 55 new 52-week highs and 16 new lows while the Nasdaq

Composite recorded 193 new highs and 129 new lows.

On U.S. exchanges, 15.29 billion shares changed hands

compared with the 13.17-billion average for the last 20

sessions.