Wall St. mixed as expectations grow for September rate hike

(Reuters) - U.S. stocks were mixed in late morning trading on Tuesday, following three straight days of decline, as another batch of strong economic data gave weight to views that the U.S. Federal Reserve could raise interest rates in September.

Growing expectations that the Fed could raise interest rates sooner rather than later pushed the blue-chip Dow index into negative territory for 2015 on Monday, while the S&P 500 and Nasdaq indexes touched their lowest in over a month.

The selloff in U.S. stocks in the past few sessions followed a series of encouraging economic reports, including stronger-than-expected May jobs data on Friday.

Data on Tuesday showed that U.S. job openings surged to a record high in April and small business confidence increased in May - signs that the economy was regaining momentum after stumbling at the start of the year.

"What we've seen is a confirmation that the stock and bond market is dependent on easy monetary policy," said James Abate, chief investment officer of Centre Funds in New York.

"The market continues to muddle and is very susceptible to a correction in the case of a shock incident."

The selloff in U.S. markets spread to the global market, with European shares slipping to a 3-1/2-month low on Tuesday.

Concerns about Greece continued to weigh, with Athens handing its creditors new proposals to unlock funds as time runs out to reach a deal to prevent the country from going bankrupt.

At 11:02 a.m. ET the Dow Jones industrial average <.DJI> was up 18.65 points, or 0.1 percent, at 17,785.2, while the S&P 500 index <.SPX> was up 1.97 points, or 0.09 percent, at 2,081.25 and the Nasdaq Composite index <.IXIC> was down 18.05 points, or 0.36 percent, at 5,003.58.

Six of the 10 major S&P 500 sectors were higher, with the energy index's <.SPNY> 0.78 percent rise leading the gains.

Apple fell 1.1 percent to $126.33 and was the biggest drag on the three major indexes, a day after the launch of its streaming music service, Apple Music.

Lululemon rose 6 percent to $65.25 after the Canadian yogawear retailer raised its full-year revenue and earnings forecast.

Sage Therapeutics jumped 14.4 percent to $85.99 after its experimental injectable drug was found to be effective in treating postpartum depression.

Declining issues outnumbered advancers on the NYSE by 1,772 to 1,129, for a 1.57-to-1 ratio on the downside. On the Nasdaq, 1,629 issues fell and 943 advanced, for a 1.73-to-1 ratio favoring decliners.

The S&P 500 index showed seven new 52-week highs and nine new lows, while the Nasdaq recorded 51 new highs and 25 new lows.

(Reporting by Tanya Agrawal; Editing by Savio D'Souza and Ted Kerr)

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