NEW YORK, Dec 15 — Wall Street ended lower yesterday after data showed producer prices increased more than expected in November, solidifying expectations the Federal Reserve this week will announce a faster wind-down of asset purchases.

The fast-spreading Omicron coronavirus variant also dampened investor sentiment after the S&P 500 index hit an all-time closing high late last week.

Declines were led by megacap tech-related stocks, with Salesforce.com, Microsoft Corp, Adobe and Alphabet Inc pulling down the S&P 500 and Nasdaq.

Apple Inc ended down 0.8 per cent, but off its session lows, after the iPhone maker said it would require customers and employees to wear masks at its US retail stores as Covid-19 cases surge.

The Dow Jones Industrial Average fell 0.3 per cent to end at 35,544.18 points, while the S&P 500 lost 0.75 per cent to 4,634.09.

The Nasdaq Composite dropped 1.14 per cent to 15,237.64.

Data from the Labour Department showed the producer price index (PPI) for final demand in the 12 months through November shot up 9.6 per cent, clocking its largest gain since November 2010. That followed an 8.8 per cent increase in October.

About two-thirds of Nasdaq stocks traded below their 200-day moving average, according to Refinitiv data, suggesting many stocks within the index are struggling, even as the overall index remains only about 6 per cent below its November record high close.

"Covid plus inflation is the Grinch that stole Christmas,” said Jake Dollarhide, chief executive officer at Longbow Asset Management. "I don’t underestimate the fact that there are some big Nasdaq names giving up some of their big gains. When the leaders sell off, it’s not a good sign.”

Ten of the 11 major S&P 500 sector indexes fell, with tech putting on the worst performance, down 1.6 per cent. Financials gained 0.6 per cent as investors bet on a hawkish tone from the Fed at the end of its two-day meeting today.

Berkshire Hathaway and Bank of America both gained more than 1 per cent and helped keep the S&P 500 from falling further.

Many investors expect the US central bank to signal a faster wind-down of asset purchases, and thus, a quicker start to interest rate hikes in order to contain the rapid rise in prices.

"I would say this meeting is when we start to get some clarity on how they’re (the Fed) going to address this idea of inflation that has remained elevated and most likely will remain an issue going into next year,” said David Keller, chief market strategist at StockCharts.com.

A Reuters poll of economists sees the central bank hiking interest rates from near zero to 0.25 per cent-0.50 per cent in the third quarter of next year, followed by another in the fourth quarter.

Beyond Meat Inc rallied 9.3 per cent after Piper Sandler upgraded the plant-based meat maker’s stock to "neutral” from "underweight.”

Pfizer gained 0.6 per cent after saying its antiviral Covid-19 pill showed near 90 per cent efficacy in preventing hospitalisations and deaths in high-risk patients, and that lab data suggests the drug retains its effectiveness against the Omicron variant.

Declining issues outnumbered advancing ones on the NYSE by a 2.70-to-1 ratio; on Nasdaq, a 2.59-to-1 ratio favoured decliners.

The S&P 500 posted 15 new 52-week highs and 2 new lows; the Nasdaq Composite recorded 18 new highs and 408 new lows.

Volume on US exchanges was 10.8 billion shares, compared with the 11.5 billion average over the last 20 trading days. — Reuters