U.S. stocks sank over 1 percent to session lows 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.
A meeting between U.S. President Donald Trump and Chinese President Xi Jinping was unlikely to take place by March 2, the deadline set by the two countries for reaching a trade deal, two U.S. administration officials and a source said.
That came minutes after White House adviser Larry Kudlow told Fox Business Network that there was a pretty sizable distance to go in the trade talks. The next round of discussions will take place in Beijing in the coming week.
Eight of the 11 major S&P sectors were in the red. The trade sensitive industrials and technology sectors fell 1.29 percent and 1.77 percent, respectively.
"We`ve been selling off all day. The fear started this morning from headlines coming out of Europe that EU growth was slowing," said Dennis Dick, head of markets structure, proprietary trader at Bright Trading LLC in Las Vegas.
"We`ve been straight up for a month with very little pullback. Europe kick started us to the downside this morning and then there was follow-through from the Trump headline and all of a sudden you have an overdue sell-off on your hands."
The European Commission slashed its economic growth forecasts for the euro zone this year and next because of an expected slowdown in the largest countries of the bloc, partly due to trade tensions.
After a strong run in January, mainly on easing trade fears, the Federal Reserve dialing back on interest rates and largely upbeat earnings reports, Wall Street has got off to a strong start this month, even as disappointing forecasts from a number of U.S. companies are giving investors pause.
More than half the S&P 500 companies have reported results, and about 70 percent of them have beat profit estimates, according to IBES data from Refinitiv. However, earnings growth estimates for the current-quarter have dropped 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," Michael Antonelli, managing director, institutional sales trading at Robert W. Baird in Milwaukee.
"Investors also think earnings are going to slow in the next few quarters."
At 11:50 a.m. ET the Dow Jones Industrial Average was down 337.05 points, or 1.33 percent, at 25,053.25, the S&P 500 was down 38.44 points, or 1.41 percent, at 2,693.17 and the Nasdaq Composite was down 121.02 points, or 1.64 percent, at 7,254.26.
Marquee names such as Facebook Inc, Apple Inc, Amazon.com Inc, Netflix Inc and Alphabet Inc fell between 1.2 percent and 2.2 percent.
The energy sector fell 2.6 percent, the most among the 9 major S&P sectors in the red, as crude prices slipped more than 1 percent.
Only the defensive real estate and utilities sectors posted gains among the 11 major S&P sectors.
Twitter Inc dropped 10.8 percent after the company forecast first-quarter revenue below estimates and reported a drop in users for the fourth quarter.
U.S. regional lender BB&T Corp said it would buy rival SunTrust Banks Inc for about $28 billion in stock. SunTrust jumped 6.7 percent and BB&T rose 1 percent, leading other regional banks higher.
Declining issues outnumbered advancers for a 3.57-to-1 ratio on the NYSE and a 2.95-to-1 ratio on the Nasdaq.
The S&P index recorded nine new 52-week highs and two new lows, while the Nasdaq recorded 25 new highs and 24 new lows.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)