US STOCKS-Wall St slump continues on U.S.-China trade uncertainty

* Trump says U.S. doing well in trade talks with China
* Dollar General jumps after Q1 profit beat
* Dow down 0.11%, S&P 500 down 0.08%, Nasdaq down 0.12%

(Updates to mid-afternoon, changes byline)
By Chuck Mikolajczak
NEW YORK, May 30 (Reuters) - U.S. stocks lost ground again
on Thursday, as conflicting comments on trade talks from
President Donald Trump and Beijing reinforced investor
nervousness that a lengthy battle could be in the offing and
harm global growth.
Trump said talks with China were going well but those
comments were countered by a senior Chinese diplomat who said
provoking trade disputes is "naked economic terrorism."
The lack of clarity around the trade battle has rattled
investors of late, after the S&P 500 had risen more than 17%
through the first four months of the year on optimism a trade
deal between the two countries could be reached.
That optimism has faded, however, as the escalating dispute
between the two countries has weighed heavily on Wall Street in
May, with each of the three main indexes declining at least 5%
for the month. The benchmark S&P 500 .SPX is nearly 6% lower
from its closing high on April 30.
"The market is coming to that realization that we are not
getting really clean or clear information and it is going to be
a lot of noise and just prepare for that," said Ben Phillips,
chief investment officer at Eventshares in Newport Beach,
California.
"It is a difficult market right now. There are a lot of
macro signals that are starting to roll over and the question is
the trade dispute causing that or is it other factors."
A government report on Thursday showed U.S. inflation was
much weaker than initially thought in the first quarter on a
sharp slowdown in domestic demand, while growth was also
slightly lower than estimated in April. The Dow Jones Industrial Average .DJI fell 27.59 points,
or 0.11%, to 25,098.82, the S&P 500 .SPX lost 2.11 points, or
0.08%, to 2,780.91 and the Nasdaq Composite .IXIC dropped 9.19
points, or 0.12%, to 7,538.12.
The trade jitters helped sustain demand for safe haven debt,
as U.S. Treasury yields held near 20-month lows. The yield curve
between three-month bills and 10-year notes remained inverted,
the inversion the widest in nearly 12 years. That, in turn, weighed on interest-rate sensitive bank
stocks .SPXBK , which dropped 1.5% and were on track for a
third straight day of declines, while the broader financial
sector .SPSY declined 0.8%.
The energy sector .SPNY fell 1.3%, as oil prices continued
their slump in part due to a smaller-than-expected decline in
U.S. crude inventories. The sector has fallen more than 10% this
month. Among stocks, Dollar General Corp DG.N jumped 7.2% after
the discount retailer's same-store sales and profit topped
expectations.
Viacom Inc VIAB.O climbed 3.6% after report that CBS Corp
CBS.N is preparing for merger talks with the media company.
CBS rose 2.5%.
PVH Corp PVH.N plunged 14.2% as the worst performer on the
S&P 500, after the Calvin Klein owner cut its annual profit
forecast as it grapples with tariffs and slowing retail growth.

Declining issues outnumbered advancing ones on the NYSE by a
1.11-to-1 ratio; on the Nasdaq, a 1.38-to-1 ratio favored
decliners.
The S&P 500 had 1 new 52-week high and 25 new lows; the
Nasdaq Composite 25 new highs and 119 new lows.