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* U.S. factory activity shrinks for first time since 2016
* Technology stocks weigh most on S&P 500, industrials
tumble
* Boeing (NYSE:BA) off on fears of more delays to 737 MAX return
* Indexes fall: Dow 1.08%, S&P 500 0.69%, Nasdaq 1.11%
(Updates to close)
By Sinéad Carew
NEW YORK, Sept 3 (Reuters) - U.S. stocks fell on Tuesday as
investors worried about global growth prospects after data
showed U.S. factory activity shrank in August for the first time
since 2016 and the United States and China imposed new tariffs
on each other over the weekend.
Investors fled riskier assets as the latest round of tariffs
and the lack of a date for a resumption of U.S.-China talks
gnawed at any hopes for a resolution to the long-running trade
war, which has rattled markets for months and weighed on world
economies. Compounding the uncertainty, the Institute for Supply
Management said early in the day that its index of national
factory activity dropped to 49.1, compared with a reading of
51.1 estimated by analysts polled by Reuters. "If anything the U.S. manufacturing data signals that the
new tariffs couldn't come at a worse time. It's bad news on top
of bad news. That's why investors are so focused on
negotiations" said Alec Young, managing director of global
markets research at FTSE Russell based in New York.
"Not only have expectations been receding for a U.S.-China
deal but they can't even agree on a date to meet," said Young.
He also cited growing uncertainty around Brexit as a concern
for investors. British lawmakers on Tuesday triggered a vote
that could allow them to stop Boris Johnson pursuing a "no-deal"
Brexit, a challenge that the government warned would prompt the
prime minister to seek an election on Oct. 14. Earlier in the day data showed British construction
companies last month suffered the sharpest drop in new orders
since the financial crisis amid Brexit jitters.
The Dow Jones Industrial Average .DJI fell 285.26 points,
or 1.08%, to 26,118.02, the S&P 500 .SPX lost 20.19 points, or
0.69%, to 2,906.27 and the Nasdaq Composite .IXIC dropped
88.72 points, or 1.11%, to 7,874.16.
Trade-sensitive industrials .SPLRCI fell 1.4%, making for
the biggest percentage loser among the S&P 11 major sectors.
Technology stocks .SPLRCT fell 1.3%, weighed down by
chipmakers, which have a large revenue exposure to China. The
Philadelphia Semiconductor index .SOX dropped 1.8%.
Boeing Co shares BA.N , tumbled 2.7% providing the biggest
drag for the Dow, after the Federal Aviation Administration said
on Friday a global panel of experts will need a few more weeks
to finish its review of the company's 737 MAX certification.
U.S. casino operators felt the brunt of slowing economic
growth in China as gambling hub Macau posted weak August casino
revenue. Shares of Las Vegas Sands Corp LVS.N , Wynn Resorts
Ltd WYNN.O and MGM Resorts International MGM.N fell between
2% and almost 4%. The only sectors that gained ground were utilities
.SPLRCU , rising 1.8%, real estate .SPLRCR , climbing 1.3% and
consumer staples .SPLRCS , which closed the session up 0.5%.
Declining issues outnumbered advancing ones on the NYSE by a
1.61-to-1 ratio; on Nasdaq, a 2.50-to-1 ratio favored decliners.
The S&P 500 posted 43 new 52-week highs and 10 new lows; the
Nasdaq Composite recorded 49 new highs and 134 new lows.
On U.S. exchanges 6.72 billion shares changed hands compared
with the 6.99 billion average for the last 20 sessions.