By Shreyashi Sanyal
(Reuters) - Wall Street fell more than 2 percent on Tuesday, led by bank stocks as a flattening U.S. Treasury yield curve set off warning lights about slowing growth and on fading hopes of a speedy resolution to the U.S.-China trade spat.
The declines, which put the benchmark S&P 500 on course for its biggest one-day percentage drop in six weeks, more than erased Monday's gains after Beijing and Washington agreed to a 90-day truce to iron out their trade differences.
Yields on two-year and three-year bonds held above the five-year yield for a second day, while the benchmark 10-year yield
The focus now is on the spread between the two-year and 10-year yields
"Historically there is a good correlation between the yield curve inverting and the timing of the next recession and the bond market has been a big focus for today," said Binky Chadha, chief strategist at Deutsche Bank in New York.
The technology sector <.SPLRCT> fell 2.80 percent, while industrials <.SPLRCI> dropped 3.47 percent over a lack of specifics on the Sino-U.S. trade truce, including no written commitments and when the truce period starts.
"As soon as investors digested the information from the discussions, they focused on the uncertainties and lack of details," Ryan Nauman, market strategist at Informa Financial Intelligence in Zephyr Cove, Nevada said.
Trade bellwethers Boeing Co's
At 1:16 p.m. ET the Dow Jones Industrial Average <.DJI> was down 565.16 points, or 2.19 percent, at 25,261.27, the S&P 500 <.SPX> was down 62.55 points, or 2.24 percent, at 2,727.82 and the Nasdaq Composite <.IXIC> was down 196.65 points, or 2.64 percent, at 7,244.86.
Amid fears of slowing U.S. growth, Dollar General Corp
Declining issues outnumbered advancers for a 3.73-to-1 ratio on the NYSE and a 4.66-to-1 ratio on the Nasdaq.
The S&P index recorded 40 new 52-week highs and 16 new lows, while the Nasdaq recorded 36 new highs and 130 new lows.
(Reporting by Shreyashi Sanyal in Bengaluru; Additional reporting by Sruthi Shankar; Editing by Shounak Dasgupta)
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)