Wall Street down as geopolitical risks trigger rush to safety

By Yashaswini Swamynathan

REUTERS - U.S. stocks drifted lower on Wednesday as investors sought shelter in safe-haven assets amid lingering geopolitical worries, while keeping the upcoming earnings season in sight.

The United States launched missiles at a Syrian airfield last week to retaliate a deadly chemical attack on civilians. The strikes pushed President Donald Trump, who came to power in January calling for warmer ties with Syria's ally Russia, and his administration into confrontation with Moscow.

Investors are concerned that these developments could distract Trump from pursuing his pro-business policies such as tax cuts, simpler regulations and higher infrastructure spending, promises that have powered Wall Street to record highs since his election in November.

The S&P 500 fell below its 50-day moving average, while gold and VIX, Wall Street's fear gauge, rose to their highest levels in five months.

At 12:35 p.m. ET (1635 GMT), the Dow Jones Industrial Average was down 72.27 points, or 0.35 percent, at 20,579.03 and the S&P 500 was down 10.19 points, or 0.43 percent, at 2,343.59. The indexes were on track for their worst one-day percentage decline in over three weeks.

The Nasdaq Composite was down 30.18 points, or 0.51 percent, at 5,836.60.

The worst hit were financials and industrials, sectors which have outperformed the broader market in the post-election rally.

The S&P 500 financial sector was off 0.83 percent, but was the biggest drag on the index due to a drop in bank heavyweights including Wells Fargo and Bank of America.

Industrials were off 1 percent, weighed down by General Electric, Union Pacific Corp and Boeing.

"Technically, we are due for a breather and if the earnings season disappoints, it could provide the correction that we need," said Josh Jalinski, president of Jalinski Advisory Group.

Wells Fargo, along with Citigroup and JPMorgan, will unofficially kick-off the first-quarter earnings season on Thursday, which will also be the last trading day of the week ahead of the Good Friday holiday.

Eight of the 11 major S&P sectors were lower.

Utilities, consumer staples and telecom services, defensive sectors with slow but predictable growth, were up. Tractor Supply was the biggest percentage loser on the S&P, down nearly 7 percent following a profit warning from the specialty retailer.

Delta Air Lines was up 1.3 percent at $45.84, boosted by a better-than-expected quarterly profit and an upbeat forecast for current-quarter passenger unit revenue.

(Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Sriraj Kalluvila)