US STOCKS-Wall St rout worsens as China hits back on trade

(For a live blog on the U.S. stock market, click LIVE/ or
type LIVE/ in a news window)
* China to impose tariffs on $60 bln of U.S. goods
* Apple's 5% drop weighs on main indexes
* S&P 4.7% below record high; China-exposed stocks worst hit
* Uber falls for second day after underwhelming IPO
* Indexes drop: Dow 2.26%, S&P 2.27%, Nasdaq 3.05%

(Changes comment, updates price)
By Sruthi Shankar and Amy Caren Daniel
May 13 (Reuters) - U.S. stock markets fell more than 2% on
Monday after China announced retaliatory tariffs on U.S. goods,
heightening fears of a full-blown trade war between the world's
two largest economies that could cripple global economic growth.
At the heart of the selloff were shares in major technology
companies including Apple Inc AAPL.O as well as chipmakers,
manufacturers and retailers that draw large chunks of their
revenue from China.
Apple's shares fell 5.2%, putting the S&P and the Dow on
track for their biggest one-day percentage drop since Jan.3.
The selloff that began with stocks surfing at an all-time
high on May 1 has now knocked almost 5 percent off the S&P 500
in less than two weeks.
That still compares favorably with a 20% fall between Oct.3
and Christmas of last year, but it has traders again talking
about the end of a decade-long rally that dates back to the
aftermath of the 2008 financial crash.
The front part of the U.S. interest rate yield curve,
running from three-month U.S. Treasury bills through to 10-year
notes, inverted for the second time in less than a week and is
seen as a classic signal that a recession is coming. US/
"The selloff is a reflection that trade talks are in worse
shape than people were expecting," said Willie Delwiche,
investment strategist at Baird in Milwaukee.
"Investors are trying to figure out how much of the rally
that we had this year was perhaps celebrating prematurely hopes
of a trade deal."
China's finance ministry said on Monday it planned to impose
tariffs ranging from 5% to 25% on 5,140 U.S. products on a
target list worth about $60 billion from June 1, striking back
after the United States raised duties last week. Bank of America Merrill analysts said the new Chinese
tariffs posed a downside risk of between 1% and 3% for S&P 500
company earnings in 2019.
The S&P 500 and the Nasdaq hit record highs just two weeks
ago on hopes of a trade deal and a positive first-quarter
earnings season. Last week's 2.2% fall was the worst for the
benchmark index since December. Tariff-sensitive Boeing Co BA.N declined 3.6% and
Caterpillar Inc CAT.N dipped 4.9%. The Philadelphia chip index .SOX was down 4.2%, adding to
a 6% decline last week. Qualcomm Inc QCOM.O , Broadcom Inc
AVGO.O and Nvidia Corp NVDA.O all fell between 3% and 4.4%.
That left the Dow Jones Industrial Average .DJI down
586.00 points, or 2.26%, at 25,356.37 by 11:22 a.m. ET. The S&P
500 .SPX fell 65.48 points, or 2.27%, to 2,815.92 and the
Nasdaq Composite .IXIC 241.62 points, or 3.05%, to 7,675.32.
Shares of Uber Technologies Inc UBER.N dropped 9%, more
than doubling their losses since the ride-hailing giant's poorly
received Wall Street debut on Friday. Banks .SPXBK , which suffer from the fall in long-term
rates below short-term funding costs, fell 2.7%.