US STOCKS-Wall Street falls as Treasury yields rise, investors digest inflation data,
Consumer prices rise on gasoline and shelter costs
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Bets on Fed December rate hike rise after inflation data
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Israel says no exceptions to Gaza siege unless hostages freed
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Indexes down: Dow 0.89%, S&P 0.97%, Nasdaq 0.92%
(Updated at 1406 ET/1806 GMT)
By Sinéad Carew and Shashwat Chauhan
Oct 12 (Reuters) - Wall Street's main indexes fell on Thursday as bond yields rose and data showed consumer prices rose more than anticipated in September, clouding the Federal Reserve's interest rate outlook.
Surging shelter costs pushed consumer prices higher last month, while the annual increase in the core figure, excluding volatile food and energy components, was the smallest in two years.
"The headline (number) was a little bit hotter than expected, but core inflation dropped (year-on-year)," said Anthony Saglimbene, chief market strategist at Ameriprise Financial in Michigan.
While the strategist said this means "the Fed's work in terms of raising interest rates is done," he cautioned the central bank is "likely to leave interest rates higher for longer."
Another set of data showed jobless claims rose 209,000 for the week ended Oct. 7, lower than an estimated 210,000 rise.
In afternoon trading stocks fell as U.S. benchmark 10-year yields added to gains to hit a session high after a U.S. Treasury auction. The benchmark yield rose above 4.7% after falling for two straight days.
The Dow Jones Industrial Average fell 302.04 points, or 0.89%, to 33,502.83, the S&P 500 lost 42.36 points, or 0.97%, to 4,334.59 and the Nasdaq Composite dropped 125.81 points, or 0.92%, to 13,533.86.
The rise in yields particularly pressured rate-sensitive sectors such as utilities and real estate, often viewed as bond proxies.
Information technology and energy were among the smallest decliners in afternoon trading.
Traders expect a
stronger chance
the Fed will end up delivering another interest-rate hike this year, and keep rates higher for longer next year.
Boston Fed President Susan Collins, who does not have a vote on the rate-setting Federal Open Market Committee (FOMC) this year, said on Wednesday that while the odds of the economy escaping a recession have grown, it is possible the central bank is not done with interest rate hikes aimed at bringing inflation back to its target.
Remarks from other Fed policymakers, including Atlanta's Raphael Bostic, are also expected on Thursday.
Meanwhile, Israel said there would be no pause in its siege of the Gaza Strip for aid or evacuations until all its hostages were freed.
Investor focus may soon shift to the earnings season, with big banks including JPMorgan Chase, Wells Fargo and Citigroup reporting their quarterly numbers before the bell on Friday.
Among individual stocks, Fastenal rose 6.2% after the industrial supplies company beat third-quarter profit estimates.
Ford Motor fell 2.5% after the United Auto Workers (UAW) union expanded its strike at the company's biggest and most profitable factory.
Declining issues outnumbered advancing ones on the NYSE by a 5.88-to-1 ratio; on Nasdaq, a 3.22-to-1 ratio favored decliners.
The S&P 500 posted 17 new 52-week highs and 31 new lows; the Nasdaq Composite recorded 33 new highs and 282 new lows.
(Reporting by Sinéad Carew in New York, Amruta Khandekar, Shashwat Chauhan and Ankika Biswas in Bengaluru; Additional reporting by Johann M Cherian; Editing by Arun Koyyur, Shounak Dasgupta, Maju Samuel and David Gregorio)
