US STOCKS-Wall Street indexes end lower; data raises uncertainty for rate-cut outlook

By Caroline Valetkevitch

NEW YORK Sept 25 (Reuters) - U.S. stocks ended lower on Thursday, with most S&P 500 sectors down as economic data increased uncertainty about the Federal Reserve's outlook for interest rate cuts.

Data showed initial jobless claims dropped 14,000 to a seasonally adjusted 218,000 for the week ended September 20. Other data showed the U.S. economy grew faster than previously estimated in the second quarter amid strong consumer spending and business investment.

Also, Chicago Fed President Austan Goolsbee said on Thursday he was uneasy with cutting rates too quickly, with inflation a risk.

The comments and data follow the U.S. central bank's move last week to lower rates by 25 basis points - its first cut since December - after signs of weakness in the labor market. It also gave indications of more rate cuts ahead. Investor expectations of another 25 bps cut in the Fed's October meeting are now at 83.4%, down from about 92% on Wednesday, according to the CME FedWatch Tool.

"The economic data that's come out over the last day or two is kind of confusing in that, in my mind, it calls into question" how much the Fed may cut rates again and whether the Fed needs to cut rates again this year, said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia.

According to preliminary data, the S&P 500 .SPX lost 33.77 points, or 0.51%, to end at 6,604.20 points, while the Nasdaq Composite .IXIC lost 116.03 points, or 0.50%, to 22,381.83. The Dow Jones Industrial Average .DJI fell 167.38 points, or 0.36%, to 45,953.90.

Most of the S&P 500 sectors ended lower.

Earlier this week, Fed Chair Jerome Powell said the U.S. central bank needs to balance inflation concerns with a weakening job market in its coming interest rate decisions.

"There's been mixed economic data," said Rick Meckler, partner at Cherry Lane Investments, a family investment office in New Vernon, New Jersey. "It makes people focus more on the inflation side" of the economic outlook.

In addition, shares of Accenture ACN.N were down even after the consulting firm reported revenue above expectations.

CarMax KMX.N shares fell after the used-car retailer reported lower second-quarter profit.

Investors are eager to hear soon from more companies on their quarterly results, especially with valuations considered high after the market's run of record highs recently.

Investors are bracing for Friday's release of the Personal Consumption Expenditures price index, the Fed's preferred inflation measure, which could shape expectations for the path of interest rates.

Even more important will be the next monthly U.S. jobs report, which is due next week.