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Constellation Brands' ( STZ ) Q2 sales dip less than expected

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Tesla down after launching low-cost model

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Crypto shares slide as bitcoin declines

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Indexes down: Dow 0.20%, S&P 500 0.38%, Nasdaq 0.67%

(Updates with closing prices)

By Stephen Culp

NEW YORK, Oct 7 (Reuters) - U.S. stocks closed lower on

Tuesday as investors, deprived of economic data resulting from

the shuttered government, looked to secondary indicators and

remarks from U.S. Federal Reserve officials for clues regarding

economic weakness and monetary policy.

All three indexes ended in negative territory after a consumer

expectations survey from the New York Federal Reserve showed

deteriorating future expectations and rising inflation

projections. The report garnered increased scrutiny amid a

federal data blackout resulting from a partisan congressional

impasse that extended the government shutdown to its seventh

day.

Investors have had to rely on secondary, independently

produced data, along with remarks from monetary policymakers, to

gauge the likelihood that the Federal Reserve will implement its

second rate cut of the year at this month's policy meeting.

"The New York Fed report probably gave traders an excuse to

take some profits since the S&P had been up for seven days in a

row," said Sam Stovall, chief investment strategist of CFRA

Research in New York. "There is an awful lot of uncertainty the

longer the government remains shut down because of the absence

of any economic data."

Economically sensitive sectors, including homebuilding

, housing, airlines, and

transport underperformed the broader market.

"The market is still very much centered on AI driving

everything, and I think some of the bloom is off the rose," said

Paul Nolte, senior wealth adviser and market strategist at

Murphy & Sylvest in Elmhurst, Illinois.

Fed Governor Stephen Miran stated his case for continued rate

cuts, stressing the risks of keeping policy too restrictive.

The Dow Jones Industrial Average fell 91.99 points, or

0.20%, to 46,602.98, the S&P 500 lost 25.69 points, or

0.38%, to 6,714.59 and the Nasdaq Composite lost 153.30

points, or 0.67%, to 22,788.36.

Among the 11 major sectors of the S&P 500, consumer

discretionary suffered the steepest percentage

decline, while consumer staples and utilities

were the top gainers.

Tesla shares extended their losses, dropping 4.5% after

the electric carmaker unveiled its low-cost Model Y.

AMD advanced 3.8% after Jefferies upgraded the stock

rating to "buy" and other brokerages hiked their price targets

the day after the chipmaker's supply deal with OpenAI bolstered

the tech rally.

Corona beer maker Constellation Brands ( STZ ) gained 1% after

posting a smaller-than-expected drop in second-quarter sales.

IBM ( IBM ) rose 1.5% after the company announced a partnership

with AI startup Anthropic.

U.S.-listed shares of Trilogy Metals soared 207.8% after

the White House said it would acquire a 10% stake in the

company.

AppLovin ( APP ) surged 7.6%, recouping nearly half of its

losses from the prior session, and topped the S&P 500 after

brokerages Citi Research and Oppenheimer allayed concerns after

a report on a U.S. Securities and Exchange Commission probe into

its data collection practices.

Bitcoin-related stocks, including Coinbase,

Strategy, Riot Platforms ( RIOT ), and MARA Holdings ( MARA )

, reversed Monday's gains as the cryptocurrency backed

away from record highs.

Declining issues outnumbered advancers by a 1.93-to-1 ratio on

the NYSE. There were 350 new highs and 75 new lows on the NYSE.

On the Nasdaq, 1,527 stocks rose and 3,126 fell as declining

issues outnumbered advancers by a 2.05-to-1 ratio.

The S&P 500 posted 36 new 52-week highs and eight new lows while

the Nasdaq Composite recorded 121 new highs and 70 new lows.

Volume on U.S. exchanges was 20.8 billion shares, compared with

the 19.44 billion average for the full session over the last 20

trading days.