Wall Street tumbles over 1% on trade, growth fears
By Shreyashi Sanyal
May 23 (Reuters) - U.S. stock indexes fell more than 1% on Thursday, as investors sold off technology, industrials and energy stocks on fears that a spiraling trade war between the United States and China would crimp global growth.
Technology, among sectors most exposed to China, was the hardest hit. Microsoft Corp MSFT.O and Apple Inc AAPL.O were down more than 1%, dragging the sector lower, while the chip index .SOX dropped 2.3%.
Oil prices plunged more than 4% on trade fears, leaving the energy index .SPNY down 3.2%, the biggest decliner among the major 11 S&P sectors.
Materials, financial and consumer discretionary sectors also posted losses of more than 1% in a broad-based decline.
"This is a textbook defensive move," said Shawn Cruz, manager of trader strategy at TD Ameritrade in New Jersey.
"The one thing that can give markets some reprieve is that if the U.S. and China come back to the negotiating table and delay the tariffs they have already put in place."
Beijing said on Thursday Washington needs to correct its "wrong actions" for trade talks to continue after the United States blacklisted Huawei Technology Co Ltd HWT.UL last week.
In further evidence of the trade war hitting domestic economy, data from IHS Markit showed U.S. manufacturing growth measured its weakest pace of activity in nearly a decade and new orders fell for the first time since August 2009.
The newest round of U.S. tariffs on Chinese imports will cost the typical American household $831 annually, according to a Federal Reserve Bank of New York research.
Stocks have succumbed to selling pressure in May after Washington and Beijing engaged in tit-for-tat tariffs and other retaliatory measures, with the S&P 500 on track to post its worst monthly decline since the December sell-off.
At 11:23 a.m. ET, the Dow Jones Industrial Average .DJI was down 357.04 points, or 1.39%, at 25,419.57. The S&P 500 .SPX was down 37.88 points, or 1.33%, at 2,818.39 and the Nasdaq Composite .IXIC was down 117.30 points, or 1.51%, at 7,633.54.
U.S. Treasury yields dropped, and two yield curve indicators briefly inverted on Thursday, sending the banking index .SPXBK down 1.95%. US/
Defensive utilities .SPLRCU was up 0.2%, while real estate .SPLRCR was flat.
Among other stocks, NetApp Inc NTAP.O slumped 11.9%, the most on the S&P 500, after the data storage equipment maker forecast current-quarter profit and revenue below Wall Street estimates.
In a bright spot, L Brands Inc LB.N jumped 12.5% after the retailer reported better-than-expected quarterly earnings.
Declining issues outnumbered advancers for a 3.96-to-1 ratio on the NYSE and a 4.12-to-1 ratio on the Nasdaq.
The S&P index recorded 20 new 52-week highs and 21 new lows, while the Nasdaq recorded 18 new highs and 134 new lows.
(Reporting by Shreyashi Sanyal and Sruthi Shankar in Bengaluru; Editing by Sriraj Kalluvila)