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* Dow Jones falls to lowest since May 2

* Airlines fall after American Airlines cuts profit forecast

* Fed's Beige Book due at 2:00 p.m. ET

* Indexes down: Dow 0.90%, S&P 0.62%, Nasdaq 0.44%

May 29 (Reuters) - Wall Street indexes retreated on Wednesday, led by declines in rate-sensitive sectors as concerns around the timing and the scale of the Federal Reserve's interest rate cuts pushed Treasury yields higher and pressured risky assets.

The blue-chips Dow led declines, falling to its lowest in nearly one month, while all S&P 500 subsectors were in the red, with real estate, financials and utilities down between 0.8% and 1.5%.

The yield on the benchmark 10-year U.S. Treasury note hit four-week highs at 4.6%, extending Tuesday's gains after a survey showed consumer confidence unexpectedly improved in May, though inflation worries persisted.

Conflicting expectations on the size and the timing of interest rates have kept the market on edge since the start of this year.

Sticky inflation and hawkish comments from central bankers have forced traders to temper down rate cut expectations to only one by November or December, per the CME FedWatch Tool, from multiple cuts expected at the start of the year.

"It's going to be a hard fought battle to get inflation to the 2% target," said Dylan Kremer, chief investment officer at Certuity.

"But we do see the trend continuing to get closer to the target over the next six to 12 months that could potentially give the Fed some wiggle room for a few interest rate cuts in the back half of the year."

The central bank's Beige Book, due at 2:00 p.m. ET on Wednesday, is expected to throw light on the state of the U.S. economy. Markets will also monitor comments from Fed policymakers including New York President John Williams and Raphael Bostic.

But the main focus this week is on Friday's release of April's Personal Consumption Expenditure data - the Fed's preferred inflation gauge.

At 11:51 a.m., the Dow Jones Industrial Average fell 348.51 points, or 0.90%, to 38,504.35, the S&P 500 lost 32.77 points, or 0.62%, to 5,273.27 and the Nasdaq Composite lost 75.58 points, or 0.44%, to 16,944.30.

The tech-heavy Nasdaq retreated after closing above the 17,000 mark for the first time on Tuesday, while the small-caps Russell 2000 index also lost 1.2%.

Marathon Oil advanced 8.1% after ConocoPhillips said it would buy the company in an all-stock deal for a little over its $15 billion market value. ConocoPhillips lost 3.8%, dropping to the bottom of the energy sector that lost 1.8%.

Airline stocks fell, led by American Airlines, which declined 14.6% after the company cut its second-quarter profit forecast.

DICK'S Sporting Goods jumped 16.4% after lifting forecasts for annual sales and profit, while Abercrombie & Fitch rose 18.9% on raised annual sales growth forecast.

Salesforce and HP Inc are set to report quarterly results after markets close.

Declining issues outnumbered advancers by a 6.03-to-1 ratio on the NYSE and by a 2.73-to-1 ratio on the Nasdaq.

The S&P 500 posted six new 52-week highs and 14 new lows, while the Nasdaq Composite recorded 29 new highs and 111 new lows. (Reporting by Johann M Cherian and Lisa Pauline Mattackal in Bengaluru; Editing by Shinjini Ganguli)