(For a Reuters live blog on U.S., UK and European stock markets, click LIVE\/ or type LIVE\/ in a news window.)<\/p>\n
* Energy, bank stocks lead market declines<\/p>\n
* All eyes on Fed's policy meeting later this week<\/p>\n
* Major airlines mixed as U.S. relaxes travel rules<\/p>\n
* Indexes down: Dow 2.23%, S&P 2.24%, Nasdaq 2.63% (Adds comment, details; updates prices)<\/p>\n
By Devik Jain<\/p>\n
Sept 20 (Reuters) - U.S. stocks sharply dropped on Monday as risk-off sentiment gripped investors on concerns over the pace of global growth and a possible spillover from China Evergrande's troubles, ahead of the Federal Reserve's policy meeting later this week.<\/p>\n
The Nasdaq tumbled as much as 2.9% in afternoon trading, led by declines in growth names including Microsoft Corp, Google-owner Alphabet Inc, Amazon.com Inc, Apple Inc, Facebook Inc and Tesla Inc.<\/p>\n
\"The potential default of the Chinese property developer could have far reaching and unexpected consequences. There's the X-factor, the potential that ripples from one collapse could erode other sectors,\" said Danni Hewson, financial analyst at AJ Bell.<\/p>\n
\"If the Chinese economy is dented, what happens to demand for those nice-to-haves like a shiny new Tesla. Shares in the car company have tumbled and the Nasdaq with them, in fact the tech heavy index makes for pretty grim viewing today.\"<\/p>\n
All the 11 major S&P sectors declined. Economy-sensitive industrials, financials and energy dropped between 1.9% and 4%.<\/p>\n
The banking sub-index shed 3.9%, tracking U.S. Treasury yields as worries about the default of Evergrande appeared to affect the broader market, with commodities slipping and investors flocking to the perceived safety of bonds..<\/p>\n
Wall Street's main indexes have been hurt this month by fears of potentially higher corporate tax rates denting earnings and have shrugged off signs inflation might have peaked.<\/p>\n
The S&P 500 is down 4.6% from its intra-day record high hit on Sept. 2 and is on track to snap a seven-month winning streak.<\/p>\n
Story continues<\/p>\n
\"This is just an environment where there's been a lot of money that has been rewarded for excessive risk taking. And now we're seeing a little bit of that risk come off... this is classic profit taking,\" said Dennis Dick, a trader at Bright Trading LLC.<\/p>\n
\"I still think a big reason for (today's selloff) is the White House and the Biden administration talking about raising the capital gains rate.\"<\/p>\n
All eyes on Wednesday will be on the Fed's policy meeting, where the central bank is expected to lay the groundwork for a tapering, although the consensus is for an actual announcement to be delayed until the November or December meetings.<\/p>\n
At 13:30 p.m. ET, the Dow Jones Industrial Average was down 772.43 points, or 2.23%, at 33,812.45, the S&P 500 was down 99.47 points, or 2.24%, at 4,333.52.<\/p>\n
The Nasdaq Composite was down 396.26 points, or 2.63%, at 14,647.71, set for its worst day since May 12.<\/p>\n
Strategists at Morgan Stanley said they expected a 10% correction in the S&P 500 as the Fed starts to unwind its monetary support, adding that signs of stalling economic growth could deepen it to 20%.<\/p>\n
The CBOE volatility index, known as Wall Street's fear gauge, hit its highest level in over four months.<\/p>\n
Airline carriers traded mixed after the United States relaxed travel restrictions on air passengers from China, India, Britain and many other European countries who have received COVID-19 vaccines in early November.<\/p>\n
Declining issues outnumbered advancers for a 8.44-to-1 ratio on the NYSE and for a 5.54-to-1 ratio on the Nasdaq.<\/p>\n
The S&P index recorded no new 52-week high and three new lows, while the Nasdaq recorded 19 new highs and 165 new lows. (Reporting by Devik Jain and Sagarika Jaisinghani in Bengaluru; Editing by Arun Koyyur, Maju Samuel and Sriraj Kalluvila)<\/p>\n
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US STOCKS-Wall St tumbles over 2% on growth worries; focus turns to Fed - Yahoo Finance<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" (For a Reuters live blog on U.S., UK and European stock markets, click LIVE\/ or type LIVE\/ in a news window.) * Energy, bank stocks lead market declines * All eyes on Fed's policy meeting later this week * Major airlines mixed as U.S. Continue reading