By Medha Singh
(Reuters) - U.S. 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 U.S. administration officials and a source familiar with the negotiations said.
"Any concern that the stalemate won't be overcome by China and U.S. 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.
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 U.S. earnings - the market has wobbled this month as disappointing forecasts from a number of U.S. 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.
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.
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.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)