May 10, 2019 / 4:00 PM / 2 months ago

US STOCKS-Wall St extends fall on fears of long-drawn trade war

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* Tariff increase on $200 bln of Chinese goods takes effect

* Two countries holding last-ditch talks in Washington

* Symantec plunges on profit warning, CEO departure

* Uber opens 6.7% below IPO price; rival Lyft tumbles

* Indexes down: Dow 1.14%, S&P 1.31%, Nasdaq 1.65% (Changes comment, updates prices)

By Amy Caren Daniel

May 10 (Reuters) - U.S. stocks tumbled more than 1% on Friday, as investors worried over the possibility of a protracted and bitter U.S.-China trade war, despite last-minute efforts to salvage a deal.

President Donald Trump said he was in “absolutely no rush” to finalize a trade agreement with China, escalating tensions after the United States increased duties to 25% on $200 billion worth of Chinese goods overnight.

Beijing threatened retaliation, but negotiators agreed to stay on for a second day of talks in Washington, raising expectations that a deal would be reached.

“Markets don’t know what to expect out of the trade talks. We are waiting for the China shoe to drop, what retaliation are they going to have for the increased tariffs, or are they going to come to a deal,” said Brad Sorensen, director of market and sector analysis at Schwab Center for Financial Research in Denver, Colorado.

“I don’t think they are going to come to a deal today, so there is more uncertainty, because there’s also the worst case scenario where talks break off and the massive trade war goes on.”

Boeing Co, the single largest U.S. exporter to China, declined 1.4%, while Caterpillar Inc dropped 2.2%.

The heightening tensions between the world’s two largest economies have renewed fears of a global economic slowdown and forced investors to seek low-risk assets such as government bonds that has resulted in longer-dated yields hovering at five-week lows.

If the trade war drags on and consumers spend less due to higher prices, the Federal Reserve might have to cut interest rates, Atlanta Fed chief Raphael Bostic said.

The interest-rate sensitive banking sector fell 0.83%.

Uber Technologies Inc shares opened 6.7% below their initial public offering price of $45 in their long-awaited market debut.

Rival Lyft Inc dropped 9% to a record low.

At 11:18 a.m. ET, the Dow Jones Industrial Average was down 295.69 points, or 1.14%, at 25,532.67. The S&P 500 was down 37.73 points, or 1.31%, at 2,832.99 and the Nasdaq Composite was down 130.63 points, or 1.65%, at 7,779.96.

The S&P 500 has fallen nearly 4% so far this week, setting the benchmark index to post its worst weekly decline since December.

Technology stocks fell 1.82%, and weighed the most on the S&P, dragged down by shares of iPhone maker and a plunge in Symantec Corp.

The antivirus software maker tumbled 15.7% after issuing a profit warning and unexpectedly announcing that its chief executive officer would step down.

Declining issues outnumbered advancers for a 2.49-to-1 ratio on the NYSE and for a 2.74-to-1 ratio on the Nasdaq.

The S&P index recorded six new 52-week highs and 12 new lows, while the Nasdaq recorded 27 new highs and 82 new lows. (Reporting by Amy Caren Daniel in Bengaluru; Editing by Sriraj Kalluvila)

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