US STOCKS-Wall Street hammered by China's plan to retaliate on trade

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* China to impose tariffs on $60 bln worth of U.S. goods
* Apple's 5% drop weighs on main indexes
* S&P about 5% below record high; China-exposed stocks worst
hit
* Uber falls for second day after underwhelming IPO
* Indexes drop: Dow 2.71%, S&P 2.72%, Nasdaq 3.50%

(Updates to early afternoon)
By Sruthi Shankar and Amy Caren Daniel
May 13 (Reuters) - U.S. stocks tumbled 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 a large share of their
revenue from China.
Apple's shares fell 5.9%, putting the S&P 500 and the Nasdaq
on track for their biggest one-day percentage drop this year.
The selloff that began with stocks surfing at an all-time
high on May 1 has now knocked almost 5% 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. Treasury yield curve, running
from three-month bills through to 10-year notes, inverted for
the second time in less than a week. A sustained inversion of
this part of the yield curve has preceded every recession in the
past 50 years. US/ "A lot of the run up this year was not only because the Fed
changed its course, but also due to the abating of trade war
concerns, and now that they've invigorated, it causes the gain
to come off," said Brent Schutte, chief investment strategist at
Northwestern Mutual Wealth Management Co.
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 tariffs posed
a downside risk of between 1% and 3% for S&P 500 company
earnings in 2019.
Tariff-sensitive Boeing Co BA.N declined 4.8% and
Caterpillar Inc CAT.N fell 5.4%, while the Philadelphia Chip
index .SOX was down 4.9%, adding to a 6% decline last
week. At 13:03 ET the Dow Jones Industrial Average .DJI was down
703.24 points, or 2.71%, at 25,239.13, the S&P 500 .SPX was
down 78.43 points, or 2.72%, at 2,802.97 and the Nasdaq
Composite .IXIC was down 277.33 points, or 3.50%, at 7,639.61.
Ten of the 11 major S&P sectors were lower, with technology
.SPLRCT , industrial .SPLRCI and material stocks .SPLRCM
posting losses of more than 3%.
Shares of Uber Technologies Inc UBER.N dropped 11.3%, more
than doubling their losses since the ride-hailing giant's poorly
received Wall Street debut on Friday. Apple shares were also hit by news that the U.S. Supreme
Court gave the go-ahead for a lawsuit by consumers accusing the
iPhone maker of monopolizing the market for its software
applications and forcing them to overpay. Banks .SPXBK , which suffer from the fall in long-term
rates below short-term funding costs, fell 3.4%.
Declining issues outnumbered advancers for a 6.05-to-1 ratio
on the NYSE and a 6.52-to-1 ratio on the Nasdaq.
The S&P index recorded nine new 52-week highs and 20 new
lows, while the Nasdaq recorded 20 new highs and 136 new lows.