US STOCKS-Wall St pressured as Huawei fallout worries spark tech sell-off

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* Apple, tech stocks drop as U.S.-China trade tensions mount
* Top chipmakers to not supply Huawei - report
* Six of 11 major S&P sectors trading lower
* Sprint, T-Mobile jump as merger wins FCC chair's backing
* Indexes down: Dow 0.32%, S&P 0.54%, Nasdaq 1.23%

(Updates to early afternoon, adds comments)
By Shreyashi Sanyal and Sruthi Shankar
May 20 (Reuters) - U.S. stocks dropped on Monday, as
Washington's restrictions on China's Huawei Technologies stoked
fears about a hit to the broader technology sector and ratcheted
up trade tensions between the world's two largest economies.
Apple Inc AAPL.O slumped 3.4%, weighing the most on the
three main indexes and driving down the S&P 500 technology
sector .SPLRCT 1.51%, the biggest decliner among the six S&P
sectors trading lower.
The iPhone maker was also pressured by a warning from HSBC
that higher prices for the company's products following the
latest increases in tariffs could have "dire consequences" on
demand.
U.S. suppliers of Huawei HWT.UL , including Qualcomm
QCOM.O , Micron Technology MU.O and Broadcom Inc AVGO.O ,
fell between 3.2% and 5.3%, while the Philadelphia Semiconductor
Index .SOX slid 3.19%, its lowest level in over two months.
"This whole thing is going to have an impact on earnings,
consumers will probably shift buying habits and it will also
turn up pressure on the U.S. and China to reach a deal sooner,"
said Robert Pavlik, chief investment strategist and senior
portfolio manager at SlateStone Wealth LLC in New York.
Huawei, the world's largest telecoms equipment maker, was
added to a trade blacklist by the Trump administration on
Thursday, piling on more worries for global markets reeling
under uncertainties sparked by the latest round of tariffs.
Mobile phone parts maker Lumentum Holdings Inc LITE.O said
it would halt shipments to Huawei and cut its quarterly revenue
expectations, driving its shares down 3%. "Inventory corrections are going on in the semiconductor
space and the industry is pricing in the Huawei impact on the
value chain but they are not pricing in the global slowdown,"
said Peter Cecchini, managing director and chief market
strategist at Cantor Fitzgerald in New York.
Alphabet Inc's GOOGL.O Google has suspended some business
with Huawei, Reuters reported on Sunday, while chipmakers
including Intel Corp INTC.O , Qualcomm, Xilinx Inc XLNX.O and
Broadcom will not supply the Chinese company until further
notice, according to a Bloomberg report. Helping limit losses on the main indexes were gains in
Sprint Corp S.N and T-Mobile US Inc TMUS.O .
Sprint shares jumped 22.5%, while T-Mobile rose 5.1% after
their proposed $26 billion merger won support of the U.S.
telecoms regulator chairman.
Rivals Verizon Communications Inc VZ.N and AT&T Inc T.N
gained about 2% each.
At 12:55 p.m. ET, the Dow Jones Industrial Average .DJI
was down 81.38 points, or 0.32%, at 25,682.62. The S&P 500
.SPX was down 15.54 points, or 0.54%, at 2,843.99 and the
Nasdaq Composite .IXIC was down 95.85 points, or 1.23%, at
7,720.43.
After touching record highs in May, Wall Street's main
indexes have succumbed to selling pressure on mounting concerns
about a prolonged U.S.-China trade war. The S&P 500 is on track
to post its worst monthly decline since the December sell-off,
trading nearly 4% off its all-time high.
A clutch of retailers such as Home Depot HD.N , Nordstrom
JWN.N , Kohl's KSS.N and Target TGT.N report this week and
investors will watch out for comments on the impact of the
latest round of tariffs.
Dish Network Corp DISH.O shares tumbled 9.9%, the most
among S&P 500 companies, after the company said it would buy
broadcast satellite service assets from EchoStar Corp in an $800
million deal.
Declining issues outnumbered advancers for a 1.59-to-1 ratio
on the NYSE and for a 1.52-to-1 ratio on the Nasdaq.
The S&P index recorded 24 new 52-week highs and 11 new lows,
while the Nasdaq recorded 26 new highs and 126 new lows.