By Ankika Biswas and Noel Randewich
(Reuters) - The S&P 500 ended lower on Friday as investors assessed economic data and awaited a potential 50-basis point interest rate hike by the U.S. Federal Reserve at its policy meeting next week.
U.S. producer prices rose slightly more than expected in November amid a jump in the costs of services, but the trend is moderating, with annual inflation at the factory gate posting its smallest increase in 1-1/2 years, data showed.
"It’s not the end of the world. But certainly, a negative surprise for the markets," said Peter Cardillo, chief market economist at Spartan Capital Securities. "Bottom line is inflation is in a down-trend but month-on-month it's hotter than expected."
However, in December, consumer sentiment improved, while inflation expectations eased to a 15-month low, a University of Michigan survey showed.
Futures trades suggest a 77% chance the Fed will raise interest rates by 50 basis points next week, with a 23% chance of a 75-basis point hike, with those odds little changed after Friday's economic data.
Consumer prices data for November, due Tuesday, will provide fresh clues on the central bank's monetary tightening plans.
Lululemon Athletica Inc tumbled after the Canadian athletic apparel maker forecast lower-than-expected holiday-quarter revenue and profit.
Netflix Inc gained after Wells Fargo upgraded the video streaming giant to "overweight" from "equal weight".
Wall Street's main indexes have fallen this week after logging two straight weekly gains. Weighing heavily on investors are fears of a potential recession next year due to extended the central bank's rate hikes.
U.S. stocks ended a recent run of losses on Thursday after data showed initial jobless claims rose modestly last week.
According to preliminary data, the S&P 500 lost 29.42 points, or 0.74%, to end at 3,934.09 points, while the Nasdaq Composite lost 77.40 points, or 0.70%, to 11,004.60. The Dow Jones Industrial Average fell 306.67 points, or 0.91%, to 33,474.81.
The energy index recorded a seventh straight session of losses, its longest losing streak since December 2018, as oil prices looked set for weekly losses on recession concerns. [O/R]
Broadcom Inc jumped after the chipmaker forecast current-quarter revenue above Wall Street estimates.
Boeing Co traded higher for much of the session after Reuters report the plane maker plans to announce a deal with United Airlines for orders of 787 Dreamliner next week.
(Reporting by Sruthi Shankar, Ankika Biswas and Johann M Cherian in Bengaluru, and by Noel Randewich in Oakland, Calif.; Editing by Vinay Dwivedi, Sriraj Kalluvila, Shounak Dasgupta and Aurora Ellis)