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Wall Street ends lower as economic data raises long-term inflation threat

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  • U.S. consumer prices post largest annual rise since 1990
  • Tesla rival Rivian Automotive surges in market debut
  • Disney falls in post-market trading after results
  • Technology biggest drag among S&P 500 sectors
  • Indexes down: Dow 0.66%, S&P 0.82%, Nasdaq 1.66%

NEW YORK, Nov 10 (Reuters) - Wall Street closed sharply lower on Wednesday as surging consumer prices curbed investor risk appetite, and stoked worries of a protracted wave of red hot inflation.

All three major U.S. stock indexes fell, extending their losses throughout the trading day and adding to Tuesday's sell-off which snapped the S&P 500's and Nasdaq's eight-session runs of all-time closing highs.

"It's not surprising that after what was truly a historic run for the market to take a pause," said Ross Mayfield, investment strategy analyst at Baird in Louisville, Kentucky. "But we do think there are enough tailwinds heading into year-end to move the market higher."

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The Labor Department's consumer price index (CPI), delivered a hotter-than-expected jump of 0.9% and the fastest year-on-year gain in 31 years. read more

The report hinted that the persistently tangled global supply chain could result in the current inflation wave taking longer to abate than many - including the U.S. Federal Reserve - had hoped.

"The inflation story is really the driver that drives all things," Mayfield added. "It will affect Fed policy and fiscal policy, it's the driver of interest rates. It's hard to talk about anything but inflation."

And Gregory Daco, chief economist of Oxford Economics, believes this report means current price spikes have some staying power.

"I think things will continue to get worse before they get better in terms of the inflation outlook because we don't see core inflation peaking until sometime in early 2022," Daco said.

The graphic shows core CPI along with other indicators and where they stand relative to the Fed's average annual 2% inflation target.

Inflation

The Dow Jones Industrial Average (.DJI) fell 240.04 points, or 0.66%, to 36,079.94, the S&P 500 (.SPX) lost 38.54 points, or 0.82%, to 4,646.71 and the Nasdaq Composite (.IXIC) dropped 263.84 points, or 1.66%, to 15,622.71.

Of the 11 major sectors in the S&P 500 eight closed red, with energy (.SPNY) suffering the biggest percentage losses. Utilities (.SPLRCU) led the gainers.

Tech (.SPLRCT) weighed heaviest on the S&P 500, with megacaps Apple Inc (AAPL.O) and Microsoft Corp (MSFT.O) among the biggest drags.

Third-quarter earnings season has reached the final stretch, and of the companies having reported, 81% have beaten street expectations.

Walt Disney Co (DIS.N) shares dropped more than 4% in after-hours trading after the media company reported disappointing streaming subscriber numbers. read more

Tesla Inc (TSLA.O) rose 4.3%, reversing several sessions of declines in the wake of CEO Elon Musk's polling Twitter users on whether he should sell 10% of his stake in the company he founded.

This comes as rival electric vehicle maker Rivian Automotive Inc (RIVN.O) made its splash as a publicly traded company, raising $12 billion. Its shares surged 29.1%. read more

Retail trading platform Robinhood Markets Inc (HOOD.O) plunged 6.0%, adding to its losses two days after reporting a security breach affecting 5 million customers. read more

Declining issues outnumbered advancing ones on the NYSE by a 2.26-to-1 ratio; on Nasdaq, a 2.50-to-1 ratio favored decliners.

The S&P 500 posted 26 new 52-week highs and 4 new lows; the Nasdaq Composite recorded 95 new highs and 121 new lows.

Volume on U.S. exchanges was 11.72 billion shares, compared with the 10.89 billion average over the last 20 trading days.

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Reporting by Stephen Culp; additional reporting by Karen Pierog in New York, and Shreyashi Sanyal and Devik Jain in Bengaluru; editing by Diane Craft

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