Wall St declines on China fears, weak profit expectations

By Caroline Valetkevitch

(Reuters) - U.S. stocks edged lower in late afternoon trading on Tuesday on renewed fears of slowing growth in China and more worries about upcoming earnings reports.

The Dow was on track to snap a seven-day streak of gains.

Biotechs were among the biggest drags, with the Nasdaq Biotech Index <.NBI> down 2.6 percent, extending recent losses, and S&P health care <.SPXHC> down 1 percent.

Data showed Chinese imports fell 20 percent in September due to weak domestic demand, indicating that growth in the world's second-largest economy was sputtering.

U.S. stocks mostly have risen since a steep selloff in late-August, triggered by the devaluation of the yuan.

Investors' bets that the Federal Reserve will keep rates at near-zero levels until next year, even while the economy is holding up, have helped stocks.

But weak earnings expectations have weighed on sentiment. JPMorgan and Intel report after the close on Tuesday, with Goldman Sachs , Bank of America , and General Electric reporting through the week.

S&P 500 companies are now expected to report a 4.9 percent fall in profit, which would be the biggest decline in six years, according to Thomson Reuters data.

"It could be a cautious approach relative to earnings. The indices have made a decent enough comeback where it would make sense for them to pause here as well," said Bruce Zaro, chief technical strategist at Bolton Global Asset Management in Boston.

At 3:19 p.m., the Dow Jones industrial average fell 40.33 points, or 0.24 percent, to 17,091.53, the S&P 500 lost 11.52 points, or 0.57 percent, to 2,005.94 and the Nasdaq Composite dropped 32.33 points, or 0.67 percent, to 4,806.32.

Shares of Ryder System were down 8.6 percent at $69.05 - the biggest percentage decliner in the S&P 500 - while FMC Corp was down 3.3 percent at $36.28, both following disappointing forecasts late Monday.

Declining issues outnumbered advancing ones on the NYSE by 2,117 to 898, for a 2.36-to-1 ratio on the downside; on the Nasdaq, 1,908 issues fell and 850 advanced for a 2.24-to-1 ratio favouring decliners.

The S&P 500 posted 12 new 52-week highs and 4 new lows; the Nasdaq recorded 58 new highs and 39 new lows.

(Additional reporting by Abhiram Nandakumar in Bengaluru; Editing by Saumyadeb Chakrabarty and Nick Zieminski)