US STOCKS-Wall St drops as tech stocks tumble on Huawei fallout fears

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* Apple, tech stocks drop as U.S.-China trade tensions mount

* Top chipmakers to not supply Huawei - report

* Indexes fall: Dow 0.51%, S&P 0.73%, Nasdaq 1.61% (Updates to open)

By Shreyashi Sanyal

May 20 (Reuters) - U.S. stocks fell on Monday, as acrackdown on China'sHuawei Technologies raised concerns of abigger impact on chipmakers and added to fears of an escalationin trade war between the two nations.

Apple IncAAPL.O slumped 3.84%, weighing the most on thethree main indexes. The S&P 500 technology sector .SPLRCT slipped 1.95%, the biggest drop among the nine major S&P sectorstrading lower.

The iPhone maker was also pressured by a warning from HSBCthat higher prices for the company's products following theincreases in tariffs could have "dire consequences" on demand.

U.S. suppliers of HuaweiHWT.UL , including QualcommQCOM.O , Micron TechnologyMU.O and Broadcom IncAVGO.O ,fell about 5%, while the Philadelphia Semiconductor Index .SOX slid 2.88%, its lowest level in over two months.

"For a lot of these tech companies, there is no biggermarket than China and there is some concern it could forestallgrowth, also forces countries to take sides and begin to allowChina to develop alternatives," said Rick Meckler, partner atCherry Lane Investments in New Vernon, New Jersey.

"It's a lot of speculation and there isn't any basis. But itlooks like the trade talks are getting worse and not better."

Huawei, the world's largest telecoms equipment maker, wasadded to a trade blacklist by the Trump administration onThursday, escalating the already bitter trade war, while Chinaon Monday accused the United States of harboring "extravagantexpectations" for a trade deal. urn:newsml:reuters.com:*:nL2N22W044

Underscoring a likely hit to U.S. tech companies, LumentumHoldings IncLITE.O said it would halt shipments to Huawei andcut its quarterly revenue expectations. Shares of Lumentum fell2.68%. urn:newsml:reuters.com:*:nL4N22W2U9

Alphabet Inc'sGOOGL.OGoogle has suspended some businesswith Huawei, Reuters reported over the weekend, while chipmakers including Intel CorpINTC.O , Qualcomm, Xilinx IncXLNX.O and Broadcom have told employees that they will notsupply the Chinese company until further notice, Bloombergreported on Sunday. urn:newsml:reuters.com:*:nFWN22V00J

Shares of Alphabet, Facebook IncFB.O and Microsoft CorpMSFT.O were all down over 2%.

In a bright spot, Sprint CorpS.N shares jumped 23%, whileT-Mobile US Inc TMUS.O gained 5.2% after the companies wonsupport of the U.S. telecoms regulator chairman for theirproposed $26 billion merger. urn:newsml:reuters.com:*:nL2N22W0A3

Verizon Communications Inc'sVZ.N 3.5% gain helped the Dowindex limit some losses, while shares of AT&T IncT.N rose 3%

At 9:45 a.m. ET, the Dow Jones Industrial Average .DJI wasdown 132.17 points, or 0.51%, at 25,631.83. The S&P 500 .SPX was down 20.89 points, or 0.73%, at 2,838.64 and the NasdaqComposite .IXIC was down 125.77 points, or 1.61%, at 7,690.51.

Investors will also look for comments from a clutch ofretailers reporting this week including Home DepotHD.N ,NordstromJWN.N , Kohl'sKSS.N and TargetTGT.N forcomments on the impact of the latest round of tariffs.

With 460 of S&P 500 companies having posted first-quarterresults, 75.2% have topped analysts' profit expectations.Analysts now expect first-quarter earnings growth of 1.4%, asharp turnaround from the 2% loss expected on April 1, accordingto Refinitiv data.

Declining issues outnumbered advancers for a 2.58-to-1 ratioon the NYSE and for a 3.00-to-1 ratio on the Nasdaq.

The S&P index recorded 13 new 52-week highs and seven newlows, while the Nasdaq recorded 11 new highs and 71 new lows. (Reporting by Shreyashi Sanyal and Sruthi Shankar in Bengaluru;Editing by Sriraj Kalluvila) ((Shreyashi.Sanyal@thomsonreuters.com; +1 646 223 8780 ;Reuters Messaging:Shreyashi.Sanyal.thomsonreuters.com@reuters.net))

This article appears in: World Markets , US Markets , Stocks
Referenced Symbols: AAPL ,

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