US STOCKS-China fears, lower oil erase 2018 gains for S&P, Dow

Reuters

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    * Huawei CFO arrest seen escalating U.S-China trade tensions
    * Technology, industrials fall on trade worries
    * Drop in oil prices pressure energy stocks  
    * Volatility index jumps to highest since Oct 30
    * Indexes drop: Dow 1.84 pct, S&P 1.79 pct, Nasdaq 1.67 pct 

 (Updates to open)
    By Shreyashi   Sanyal
    Dec 6 (Reuters) - U.S. stocks tumbled on Thursday, erasing
this year's slim gains in the S&P 500 and the Dow Jones
Industrial Average, as the arrest of a top Huawei executive
sparked fears of a flare-up in Sino-U.S. tensions, while weak
oil prices added more pressure.
    The arrest of Chinese smartphone maker Huawei Technologies
Co Ltd's  HWT.UL  chief financial officer in Canada for
extradition to the United States cast fresh doubts over the
prospect of Washington and Beijing striking a deal in their
90-day truce period.  urn:newsml:reuters.com:*:nL1N1YA1YR
    The markets enjoyed a mini rally last week through Monday
after the Federal Reserve signaled that the pace of rate
increases could slow and the China-U.S. truce over the weekend.
    But optimism over a trade resolution faded Tuesday and,
along with a drop in longer-dated U.S Treasury yields, rekindled
worries of slowing economic growth and sent Wall Street sliding.
    Benchmark 10-year Treasury yield held at three-month lows on
Thursday and piled more pressure on the market along with a drop
in oil prices after the OPEC signaled it may agree to a
smaller-than-expected cut in crude output.  O/R 
    "In general, we all have the same questions we did on
Tuesday," said Art Hogan, chief market strategist at B. Riley
FBR in New York. "The news on Huawei throws another level of
uncertainty on our ability to actually come to some agreement
with China."
    Data showed the U.S. trade deficit jumped to a 10-year high
in October, suggesting the Trump administration's tariff-related
measures to shrink the trade gap were ineffective.  urn:newsml:reuters.com:*:nL1N1Y91Q8
    All the 11 major S&P sectors were lower, led by the
technology sector's  .SPLRCT  1.93 percent drop.
    Worries over Huawei, one of the largest buyers of chips
according to research firm Bernstein, sent the Philadelphia
Semiconductor index  .SOX  tumbling 2.30 percent.
    The trade-sensitive industrial sector  .SPLRCI  fell 1.88
percent. Energy stocks  .SPNY  retreated 2.92 percent, while the
drops in the bond market pushed financials  .SPSY  2.51 percent
lower.
    At 10:04 a.m. ET, the Dow  .DJI  was down 460.33 points, or
1.84 percent, at 24,566.74, the S&P 500  .SPX  was down 48.34
points, or 1.79 percent, at 2,651.72 and the Nasdaq Composite
 .IXIC  was down 119.75 points, or 1.67 percent, at 7,038.68.
    The CBOE Volatility Index  .VIX , known as Wall Street's
"fear gauge", jumped to its highest since Oct. 30.
    Apple Inc  AAPL.O  fell 3.1 percent and was the biggest drag
on the S&P and the Nasdaq, while trade bellwether Boeing Co's
 BA.N  1.9-percent decline weighed the most on the Dow.
    Declining issues outnumbered advancers for a 6.84-to-1 ratio
on the NYSE and a 3.85-to-1 ratio on the Nasdaq.
    The S&P index recorded two new 52-week highs and 63 new
lows, while the Nasdaq recorded four new highs and 261 new lows.

 (Reporting by Shreyashi Sanyal in Bengaluru; Editing by
Saumyadeb Chakrabarty)
 ((Shreyashi.Sanyal@thomsonreuters.com; +1 646 223 8780 ;
Reuters Messaging:
Shreyashi.Sanyal.thomsonreuters.com@reuters.net))

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