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Carmax jumps after quarterly profit beat
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Starbucks down on workers' strike next week
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Indexes down: Dow 0.51%, S&P 0.60%, Nasdaq 0.86%
(Updated at 12:14 p.m/ 1614 GMT)
By Shubham Batra and Shristi Achar A
June 23 (Reuters) - Wall Street's main indexes fell on Friday and were set for weekly declines as hawkish comments from Federal Reserve officials fueled worries of interest rates staying higher for longer. San Francisco Fed Bank President Mary Daly said in an interview to Reuters that two more rate hikes this year is a "very reasonable" projection, but hinted for the need for a more careful approach.
Her comments followed a hawkish stance by Fed Chair Jerome Powell in his two-day testimony before the Senate Banking Committee earlier this week.
Markets calmed briefly and the S&P 500 and the Nasdaq added some gains in the previous session after Powell said the Fed will proceed with caution.
But the indexes were still set to snap multiple weeks of gains, their worst weekly performance since the bank rout in March.
The S&P 500 is on track to end a five-week winning streak, while the Nasdaq Composite is on pace to end an eight-week run of gains. The Dow Jones may close lower for a third-straight week.
"You're seeing a little bit of profit taking after a big run," said Michael James, managing director of equity trading at Wedbush Securities.
"We're clearly overbought and without proof being demonstrated by the Bulls, it is going to be a tough slog from here to make higher highs, especially with the weakness that we're seeing overseas this week."
Money markets are still pricing in one more rate hike of 25 basis points (bps) in July, according to CME Group's FedWatch tool, as opposed to two more as suggested by Powell.
Yields on the 2-year, which best reflects interest rate expectations, dropped to hover at 4.77% on Friday, in line with the European bond market following weaker-than-expected euro zone data.
On the data front, S&P Global's Purchasing Managers' Index for both U.S. manufacturing and services activity showed business activity fell to a three-month low in June as services growth eased for the first time this year and the contraction in the manufacturing sector deepened.
All 11 major S&P 500 sectors were trading lower, with technology stocks leading declines.
Market heavyweights, including Tesla, Nvidia and Microsoft, were down between 0.8% and 1.7%, pressuring the tech-heavy Nasdaq.
Meanwhile, Meta Platforms will return to its former status as a full-growth stock after financial data provider FTSE Russell finishes its annual shakeup of its stock index components later in the day.
At 12:14 p.m. ET, the Dow Jones Industrial Average was down 172.59 points, or 0.51%, at 33,774.12, the S&P 500 was down 26.28 points, or 0.60%, at 4,355.61, and the Nasdaq Composite was down 117.01 points, or 0.86%, at 13,513.60.
Carmax Inc jumped 8.6% after the used-car retailer's first-quarter profit exceeded market expectations, benefiting from cost cuts.
Starbucks Corp fell 2.3% as the coffee chain's unions said around 3,500 workers will strike next week in the U.S. after it claimed the company banned Pride month decorations at its cafes.
Declining issues outnumbered advancers for a 2.27-to-1 ratio on the NYSE and for a 2.30-to-1 ratio on the Nasdaq.
The S&P index recorded 14 new 52-week highs and four new lows, while the Nasdaq recorded 25 new highs and 98 new lows. (Reporting by Shubham Batra and Shristi Achar A in Bengaluru; Editing by Arun Koyyur)
