Wall Street dips as investors eye slowing economy
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* U.S. composite PMI at lowest since February 2021
* Zoom tumbles on weak forecast
* Macy's shares rise on earnings beat
* Indexes: S&P 500 -0.14%, Nasdaq +0.19%, Dow -0.45%
By Bansari Mayur Kamdar and Noel Randewich
Aug 23 (Reuters) - Wall Street dipped on Tuesday as investors focused on data showing a slowing economy ahead of a U.S. Federal Reserve gathering later this week in Jackson Hole, Wyoming.
The S&P 500 and Dow Jones Industrial Average moved down after data showed private-sector business activity in the United States contracted for a second straight month in August, with particular softness in the services sector as demand weakened in the face of inflation and tighter financial conditions.
The S&P Global flash composite purchasing managers index, or PMI, for August dropped to 45 this month, the lowest since February 2021, from a final reading of 47.7 in July. A reading below 50 indicates a contraction in activity.
Of the 11 S&P 500 sector indexes, eight declined, led lower by real estate .SPLRCR , down 1.71%, followed by a 1.47% loss in health care .SPXHC .
Stocks have declined in recent sessions ahead of this week's central bank gathering in Jackson Hole, where Fed Chair Jerome Powell is expected on Friday to reinforce a strong commitment to stamp out inflation running at four-decades high.
Traders are split between expecting a 50 basis points hike and a 75 bps hike by the central bank after several policymakers recently pushed back against expectations of a dovish pivot and emphasized the Fed's commitment to fight against inflation.
"What we have seen in the past week is the realization that the Fed could still raise interest rates by 75 basis points in September," said Jake Dollarhide, chief executive of Longbow Asset Management in Tulsa, Oklahoma. "The market fears that Powell's going to go back into a hawkish stance."
The benchmark 10-year yield rose to its highest level since late July.
Zoom Video Communications Inc ZM.O tumbled about 15% after the former "stay-at-home" stock darling cut its annual profit and revenue forecasts.
After a rough start to the year, markets rallied since mid-June on hopes inflation has peaked, but that summer rally snapped last week due to renewed fears around an aggressive monetary policy tightening path by the Fed.
In afternoon trading, the S&P 500 was down 0.14% at 4,132.39 points.
The Nasdaq gained 0.19% to 12,404.59 points, while the Dow Jones Industrial Average was down 0.45% at 32,915.83 points.
The S&P 500 energy index .SPNY rallied 3.3%, tracking the jump in crude prices as tight supply moved back into focus.
Macy's Inc M.N rose 3.2% after the retailer beat quarterly profit estimates, while Palo Alto Networks Inc PANW.O surged 12% after the cybersecurity firm posted upbeat quarterly results and announced a stock split plan.
Across the U.S. stock market .AD.US , advancing stocks outnumbered falling ones by a 1.1-to-one ratio.
The S&P 500 posted one new high and 30 new lows; the Nasdaq recorded 29 new highs and 133 new lows.
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Reporting by Bansari Mayur Kamdar and Devik Jain in Bengaluru
and by Noel Randewich in Oakland, Calif., Editing by Marguerita