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August producer prices slightly above estimates

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Moderna ( MRNA ) tumbles after dour FY25 revenue forecast

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Kroger ( KR ) gains after results

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Indexes: Dow down 0.1%, S&P 500 flat, Nasdaq up 0.1%

(Updated at 09:45 a.m. ET)

By Shashwat Chauhan and Lisa Pauline Mattackal

Sept 12 (Reuters) - Wall Street was little changed on

Thursday after hot producer prices data kept a smaller 25-basis

point interest rate cut by the Federal Reserve firmly on the

table, while vaccine maker Moderna's ( MRNA ) shares slumped following a

downbeat revenue forecast.

The producer price index (PPI) for final demand rose 0.2% in

August, compared with estimates of 0.1% growth. The core number,

which strips out volatile food and energy prices, rose 0.3%,

higher than the 0.2% forecast.

"Headline PPI inflation came in as expected, but the core

rate followed the consumer's (consumer price index) core rate

almost to the tee, a little bit more than expected," said Peter

Cardillo, chief market economist at Spartan Capital Securities.

"If you look at today's PPI numbers it just confirms the Fed

is not going to be as aggressive in cutting rates as the market

was expecting."

Separately, initial claims for state unemployment benefits

stood at 230,000 for the week ended Sept. 7, in line with

estimates.

Meanwhile, Moderna's ( MRNA ) shares dropped 17.8% to their

lowest intraday level since November. They were the biggest

decliner on the S&P 500 after the company forecast sales between

$2.5 billion and $3.5 billion next year, below analysts'

estimates.

A string of weakening employment and economic growth data

over the past few weeks had led to rising bets on a

larger-than-usual 50-bps interest rate reduction from the U.S.

central bank, but those expectations have largely faded.

Following Thursday's data and the inflation report in the

previous session, traders now see an 85% chance of the Fed

cutting interest rates by 25 bps when it meets on Sept. 17-18,

according to CME's FedWatch Tool. It would be the first rate cut

since March 2020.

"Our base case forecast looks for a 25 bps reduction in the

federal funds rate at the September FOMC meeting followed by two

50 bps rate cuts at the November and December FOMC meetings,"

analysts at Wells Fargo said.

The Dow Jones Industrial Average fell 41.40 points,

or 0.10%, to 40,820.31, the S&P 500 gained 0.10 point to

5,554.23, and the Nasdaq Composite gained 24.42 points,

or 0.14%, to 17,419.95.

The information technology index pulled back after

a 3.2% jump on Wednesday, falling 0.3%, while the healthcare

sector also fell 0.3%.

An index tracking semiconductor shares dropped 0.7%,

led by a more than 5% fall in Micron Technology ( MU ) after a

report that Exane BNP Paribas downgraded the chipmaker's shares

to "underperform" from "outperform."

The more economically sensitive small-cap Russell 2000

meanwhile outperformed, rising 0.5%.

Among other stocks, Kroger ( KR ) gained 3% after the

supermarket chain beat estimates for second-quarter results and

raised the lower end of its annual sales forecast.

Chemicals maker Dow slipped 0.7% after lowering its

third-quarter revenue forecast due to an unplanned event at one

of its plants in Texas.

Advancing issues outnumbered decliners for a 2.01-to-1 ratio

on the NYSE and a 1.39-to-1 ratio on the Nasdaq.

The S&P 500 posted 22 new 52-week highs and no new low,

while the Nasdaq Composite recorded 35 new highs and 27 new

lows.