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US STOCKS-Wall St dragged down by Iran tensions, trade worries; Fed in focus


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* Communication services, technology sector fall the most

* AbbVie slides after $63 bln deal to buy Allergan

* Fed Chair Powell slated to speak at 1:00 p.m. ET

By Medha Singh

June 25 (Reuters) - Wall Street's main indexes slipped onTuesday, hit by trade jitters and rising tensions in the MiddleEast, while investors focused on speeches by Federal Reserveofficials for clues on monetary policy.

Fed Chair Jerome Powell is among a host of central bankpolicymakers scheduled to speak amid rising expectations of aninterest rate cut for the first time since the financial crisis.

Traders fully expect a rate cut from the U.S. central bankin July and see a 40% chance of a 50 basis point move, CMEGroup's FedWatch program showed.

The banking sector .SPXBK , which tends to take a hit froma low interest rate environment, was down 0.83%, while thefinancial sector .SPSY dropped 0.5%. US/

The prospect of more monetary stimulus for the economy hashelped Wall Street's main indexes rise a least 6.5% this month,with the S&P 500 .SPX hitting a record high last week.

"We've just got a market here that has perhaps reached alevel of fatigue," said Bill Northey, senior investment directorat U.S. Bank Wealth Management in Minneapolis.

Dampening hopes of a U.S.-China trade deal at the G20 summitlater this week, a senior U.S. official said President DonaldTrump is "comfortable with any outcome" from the talks with hisChinese counterpart. urn:newsml:reuters.com:*:nL2N23V1M2

"We're not of a belief that anything material is likely tocome from this meeting (G20), other than potentially anagreement to continue to negotiate," Northey said.

In a dramatic and unprecedented move to increase pressure onIran, Trump on Monday imposed new sanctions on the country'ssupreme leader and foreign minister, driving investors towardgovernment bonds, the yen and Swiss franc. urn:newsml:reuters.com:*:nL8N23W1GK

At 11:07 a.m. ET the Dow Jones Industrial Average .DJI wasdown 56.33 points, or 0.21%, at 26,671.21, the S&P 500 .SPX was down 12.05 points, or 0.41%, at 2,933.30 and the NasdaqComposite .IXIC was down 59.87 points, or 0.75%, at 7,945.83.

The communication services sector .SPLRCL fell 1.35% andthe technology sector .SPLRCT 0.72%, the most among the 11major S&P sectors.

A multibillion dollar deal helped the healthcare sector .SPXHC stay afloat. AbbVie IncABBV.N said it would buyBotox-maker Allergan PlcAGN.N for about $63 billion. Allergansurged 26.5%, while shares of AbbVie tumbled 14.9%. urn:newsml:reuters.com:*:nL4N23W2KP

Declining issues outnumbered advancers for a 1.28-to-1 ratioon the NYSE and for a 1.40-to-1 ratio on the Nasdaq.

The S&P index recorded 23 new 52-week highs and five newlows, while the Nasdaq recorded 16 new highs and 52 new lows. (Reporting by Medha Singh and Aparajita Saxena in Bengaluru;Editing by Anil D'Silva) ((Medha.Singh@thomsonreuters.com; within U.S. +1646 223 8780,outside U.S. +91 80 6749 1130; Twitter: https://twitter.com/medhasinghs; Reuters Messaging: medha.singh.thomsonreuters.com@reuters.net))






This article appears in: Stocks , World Markets , Politics
Referenced Symbols: ABBV ,



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