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* U.S. still pushing to limit capital flows to China - BBG
* China tones down expectations ahead of trade talks - SCMP
* Washington expands blacklist on Chinese firms
* Boeing falls on fresh worries over 737 MAX
* Indexes down: Dow 1.07%, S&P 500 1.21%, Nasdaq 1.18%
(Updates prices, adds comments)
By Shreyashi Sanyal
Oct 8 (Reuters) - U.S. stocks tumbled on Tuesday as optimism
faded over the outcome of trade talks after a report the Trump
administration was moving ahead with efforts to limit capital
flows to China and the inclusion of Chinese firms to a
blacklist.
The declines were broad-based, with the 11 major S&P 500
sectors trading lower and all the 30 components of the blue-chip
Dow Jones index in negative territory.
Adding to the pessimism was a South China Morning Post
report that said China had toned down expectations ahead of the
high-level talks set to begin on Thursday, and that the Chinese
delegation could depart Washington a day earlier than planned.
"The headlines are painting a picture of a less optimistic
tone to the trade talks this week," said John Zaller, chief
investment officer of MAI Capital Management in Cleveland, Ohio.
"Investors are not expecting a big deal or a small deal this
week, but anything less than a tariff delay would be a pretty
big disappointment for the markets."
The U.S. widened its trade blacklist to include Chinese
video surveillance firm Hikvision 002415.SZ and surveillance
equipment maker Zhejiang Dahua Technology 002236.SZ among
others, drawing a sharp rebuke from Beijing. This pressured U.S. suppliers. Intel Corp INTC.O , Nvidia
Corp NVDA.O , Western Digital WDC.O and Seagate Technology
STX.O fell between 1.7% and 4%, while Ambarella Inc AMBA.O
slumped 9%.
The Philadelphia Semiconductor index .SOX declined 2.6%,
while technology stocks .SPLRCT dropped 1.2%.
Weighing on the Dow Jones Industrial Average .DJI was a
1.6% fall in shares of Boeing Co BA.N .
The Wall Street Journal reported friction between the United
States and Europe could further delay efforts to resume flights
of the planemaker's best-selling 737 MAX jets, which have been
grounded since early 2019. Boeing said it delivered half the
number of planes in the first nine months of 2019 than it did in
the same period a year earlier. At 11:27 a.m. ET, the Dow Jones Industrial Average .DJI
was down 283.29 points, or 1.07%, at 26,194.73, while the S&P
500 .SPX was down 35.46 points, or 1.21%, at 2,903.33. The
Nasdaq Composite .IXIC was down 94.03 points, or 1.18%, at
7,862.27. The S&P 500 and Dow indexes fell below their 100-day
moving average.
Despite the steep declines, the indexes were trading above
last week's lows, when a contraction in U.S. manufacturing and a
dismal reading on business activity sparked fears of a looming
recession in the world's biggest economy.
While moderate jobs growth in September lifted sentiment on
Friday, traders still see an 84% chance of the Federal Reserve
cutting interest rates by a quarter percentage point in October,
according to CME Group's FedWatch tool.
Those bets were bolstered on Tuesday by data that showed
U.S. producer prices unexpectedly fell in September. Market participants will now focus on third-quarter earnings
season beginning next week and analysts expect the worst
quarterly profit performance since 2016, with earnings from S&P
500 companies declining nearly 3% from a year earlier, based on
IBES data from Refinitiv.
U.S.-listed Chinese stocks declined, with Alibaba Group
Holding BABA.N , JD.com Inc JD.O and Baidu Inc BIDU.O
falling between 1.5% and 3%.
Declining issues outnumbered advancers for a 3.59-to-1 ratio
on the NYSE and for a 3.63-to-1 ratio on the Nasdaq.
The S&P index recorded two new 52-week highs and 15 new
lows, while the Nasdaq recorded eight new highs and 101 new
lows.