US STOCKS-Wall St slide on global growth fears erases S&P's 2018 gains

Reuters

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    * Huawei CFO arrest seen escalating U.S-China trade tensions
    * All 11 major S&P sectors drop, with financials biggest
drag
    * Financials hit by drop in bond yields and rate hike bets
    * Lower oil prices hit energy stocks; VIX at highest since
Oct
30Indexes drop: Dow 3.10 pct, S&P 2.88 pct, Nasdaq 2.41 pct

 (Adds comments, updates prices)
    By Shreyashi   Sanyal
    Dec 6 (Reuters) - The S&P 500 and the Dow Jones Industrial
Average slipped back into losses for the year on Thursday as
U.S. stocks slid on mounting worries of slowing global growth
after a fresh twist in China-U.S. tensions as well as falling
oil prices and U.S. bond yields.
    The Dow sank more than 3 percent, or over 750 points, while
the S&P and the Nasdaq shed roughly 2.5 percent, adding to a
more than 3 percent tumble for the three indexes on Tuesday.
    Canada arrested Chinese smartphone maker Huawei Technologies
Co Ltd's  HWT.UL  chief financial officer for extradition to the
United States, casting fresh doubts over the prospect of Beijing
and Washington striking a deal on trade tariffs in their 90-day
truce period.  urn:newsml:reuters.com:*:nL1N1YA1YR
    "Disappointment in the China agreement and the arrest of
Huawei CFO is on everybody's mind today and it puts a damper in
the trade talks," said Larry Benedict, founder of Opportunistic
Trader in Boca Raton, Florida.
    Optimism after the trade truce over the weekend boosted Wall
Street on Monday, extending a rally from last week when the
Federal Reserve signaled the pace of rate increases could slow.
    But that optimism faded on Tuesday and, along with a drop in
longer-dated U.S Treasury yields, sent the S&P to its biggest
single-day percentage drop in about two months.
    The drop continued Thursday – the U.S. market was closed on
Wednesday – as bond yields and oil prices both slid.
    Benchmark 10-year Treasury yield held at three-month lows as
traders scaled back bets on the number of rate hikes after data
showed the U.S. trade deficit hit a 10-year high in October and
that the pace of job growth was moderating.  US/   urn:newsml:reuters.com:*:nL1N1Y91Q8
    Crude oil prices fell after an OPEC meeting in Vienna over
production policy ended without a decision. Earlier the OPEC
signaled it may agree to a smaller cut than expected.  O/R 
    All the 11 major S&P sectors were in the red. Technology
 .SPLRCT  fell 2.28, energy  .SPNY  retreated 3.43 percent,
while the trade-sensitive industrials  .SPLRCI  fell 2.85
percent.
    But the biggest drag on the markets was a 3.53 percent-slump
in financials  .SPSY  as bond yields fell and bets of a rate
hike were pushed lower.
    "If markets keep going down then the Fed is not going to
(raises rates)," Benedict said.
    At 11:27 a.m. ET, the Dow  .DJI  was down 776.45 points, or
3.10 percent, at 24,250.62, the S&P 500  .SPX  was down 77.81
points, or 2.88 percent, at 2,622.25 and the Nasdaq Composite
 .IXIC  was down 172.30 points, or 2.41 percent, at 6,986.12.
    The CBOE Volatility Index  .VIX , the most widely followed
barometer of expected near-term volatility for the S&P, 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  6.6 percent decline weighed the most on the Dow.
    Declining issues outnumbered advancers for a 5.70-to-1 ratio
on the NYSE and a 3.34-to-1 ratio on the Nasdaq.
    The S&P recorded two new 52-week highs and 68 new lows. The
Nasdaq showed seven new highs and 311 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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