Dec 1 (Reuters) - Wall Street closed lower on Wednesday after a morning rally faded as investors fretted about the latest coronavirus variant and the first evidence of its U.S. arrival while they also digested Federal Reserve Chair Jerome Powell"s comments on surging inflation. After having advanced as much as 1.9% by late morning, the S&P 500 had given up its gains to turn negative by late afternoon along with the Dow and Nasdaq.Late in the day, the U.S. Centers for Disease Control said the country had detected its first case of the Omicron variant, which had infected a person who came from South Africa, where the variant was initially discovered. Earlier on Wednesday, the Fed"s Powell said policymakers needed to be ready to respond to the possibility that inflation may not recede in the second half of next year as expected. read moreWall Street had tumbled on Tuesday after Powell had surprised the market by signaling that the central bank would consider accelerating the withdrawal of its bond buying program at its December meeting amid a surge in inflation. "The market"s grappling with the twin concerns of the Omicron variant, which may or may not be able to evade the vaccine, and a more hawkish Powell than expected," said Chris Zaccarelli the chief investment officer at Independent Advisor Alliance in Charlotte, North Carolina. Wall Street had tumbled sharply on Friday when it first heard of the Omicron variant with health officials saying they have yet to figure out how transmissible or dangerous the variant is and how much protection existing vaccines can provide against it. read more On Monday, the market rebounded sharply as investors looked for bargains after the sell-off, only to fall again on Tuesday because of the Powell comments. "We tried to buy the dip again (on Wednesday) but news that Omicron is here already has taken some of the wind out of the sails of the bulls," said Zaccarelli. According to preliminary data, the S&P 500 (.SPX) lost 54.09 points, or 1.22%, to end at 4,511.14 points, while the Nasdaq Composite (.IXIC) lost 291.76 points, or 1.88%, to 15,244.20. The Dow Jones Industrial Average (.DJI) fell 476.74 points, or 1.38%, to 34,014.22. While all of the 11 major S&P sectors were gaining into the early afternoon, most sectors were negative toward the end of the session. The communications services sector (.SPLRCL) was the biggest loser throughout the afternoon. Ahead of the close the sole advancing sector was utilities (.SPLRCU), a more defensive sectors which tends to draw interest when investors are fleeing from riskier bets. Salesforce.com Inc (CRM.N) forecast current-quarter profit below estimates as it faces stiff competition from rivals including Microsoft, sending its shares sharply lower.[nL4N2SL4DM] The World Health Organization said it expected to have more information on the transmissibility of the Omicron variant within days, and that the agency believes the existing COVID-19 vaccines will work against the variant. read more Lauren Goodwin, economist and portfolio strategist at New York Life Investments, said it was not surprising to see volatility as investors digest uncertainties including the lack of information on Omicron and the latest signals from the Fed. However Goodwin also pointed at Wednesday"s positive economic data, which was "reminding investors that the economic and corporate backdrop for this market is really strong." U.S. manufacturing activity picked up in November amid strong demand for goods. read more