Thursday's early afternoon trade: Wall Street slides on rekindled US-China trade fears

US stocks sank over 1 percent on Thursday on fears that the United States and China would not be able to reach a trade deal with less than a month left in their fragile truce, adding to worries about a slowdown in global growth. President Donald Trump and Chinese President Xi Jinping were unlikely to meet by an early March deadline set by the two countries for reaching a deal, two US administration officials and a source familiar with the negotiations said.
That news came after White House adviser Larry Kudlow told Fox Business Network there was a "pretty sizable distance" between the countries, which are set to resume discussions in Beijing next week. "Any concern that the stalemate won't be overcome by China and US is going to create negative sentiment for the markets just because trade is the single largest overhang," said Mike Loewengart, vice-president of investment strategy at E*Trade Financial in New York.
Nine of the 11 major S&P sectors fell. The technology sector slid 1.58 percent, with chipmakers tumbling 2.23 percent. Chipmakers get a large chunk of their revenue from Chinese customers. The trade-sensitive industrials sector fell 1 percent. Wall Street was already under pressure after the European Commission, earlier in the day, slashed its euro zone growth forecasts for this year and the next due to an expected slowdown in the largest countries of the bloc, partly on trade tensions.
After Wall Street's strong run in January - on easing trade fears, a dovish Federal Reserve and largely upbeat US earnings - the market has wobbled this month as disappointing forecasts from a number of US companies give investors pause, the latest being Twitter Inc. More than half the S&P 500 companies have reported fourth-quarter results, with about 71 percent beating profit estimates, according to IBES data from Refinitiv. However, current-quarter earnings growth estimates have shrunk to 0.1 percent, from 5.3 percent at the start of the year.
"Earnings weren't as bad as expected, but are not nearly enough to get markets back to the highs. Investors also think earnings are going to slow in the next few quarters," said Michael Antonelli, managing director, institutional sales trading at Robert W. Baird in Milwaukee. At 1:06 p.m. ET the Dow Jones Industrial Average was down 300.04 points, or 1.18 percent, at 25,090.26, the S&P 500 was down 33.80 points, or 1.24 percent, at 2,697.81 and the Nasdaq Composite was down 103.87 points, or 1.41 percent, at 7,271.41.
Energy stocks fell 2.43 percent as crude prices sank. Only the defensive real estate and utilities sectors were higher. Twitter tumbled 9.4 percent after forecasting that revenue in the first quarter would be weaker than expected, while full-year operating costs would rise.
SunTrust Banks Inc jumped 8.3 percent after agreeing to be bought for about $28 billion in stock by fellow regional lender BB&T Corp, which rose 2.4 percent.
The prospects of further deals sparked gains in other regional banks, although a drop in the large Wall Street lenders led to declines in the overall banks and financials indexes. Declining issues outnumbered advancers for a 3.08-to-1 ratio on the NYSE and a 2.64-to-1 ratio on the Nasdaq. The S&P index recorded nine new 52-week highs and two new lows, while the Nasdaq recorded 26 new highs and 26 new lows.