US STOCKS-Wall St tumbles as Trump tariff threat adds to pandemic woes

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* U.S.-China trade spat back in spotlight
* Amazon slides as it sees possible Q2 loss
* U.S. manufacturing skids to 11-year low in April
* Indexes down: Dow 2.53%, S&P 500 3%, Nasdaq 3.54%

(Updates to early afternoon)
By C Nivedita and Shreyashi Sanyal
May 1 (Reuters) - A Wall Street selloff deepened on Friday
as President Donald Trump threatened to impose new tariffs on
Beijing over the coronavirus crisis, compounding fears about the
pace of an economic recovery from a looming recession.
Trump's threat pulled attention back to the trade war
between the world's two largest economies, which have slapped
tit-for-fat tariffs on each other's goods and kept global
financial markets on tenterhooks for nearly two years.
While the two sides reached a so-called Phase-1 trade deal
in January, tariffs of up to 25% have remained on some $370
billion worth of Chinese goods imports annually. "A rise in tension between China and the U.S. certainly
could have a negative impact on the U.S. economy and business
confidence, which is already hurt due to shutdowns," said Carin
Pai, director of equity management at Fiduciary Trust
International in New York.
Investors are also nervous after grim manufacturing data
underlined the extent of the economic damage from state-wide
curbs, Pai said.
U.S. manufacturing activity plunged to an 11-year low in
April, supporting analysts' views the economy was sinking deeper
into recession. However, the Institute for Supply Management's
(ISM) index reading of 41.5 last month was a smaller than the
expected drop to 36.9. The energy index .SPNY slid 5.4% as big oil firms Exxon
Mobil XOM.N and Chevron Corp CVX.N said they were slamming
the brakes on U.S. shale oil production due to a crash in oil
prices. The consumer discretionary subindex .SPLRCD slid 5% after
Amazon.com Inc AMZN.O said it could post its first quarterly
loss in five years as it was spending at least $4 billion in
response to the coronavirus pandemic. The e-commerce giant's
shares tumbled 7.8%. Apple Inc AAPL.O fell 1.5% after Chief Executive Officer
Tim Cook said it was impossible to forecast overall results for
the current quarter because of uncertainty created by the virus.
The S&P 500 technology index .SPLRCT shed 3% led by
declines in trade-sensitive chip stocks. The Philadelphia
Semiconductor index .SOX fell 5%.
With nearly half of the S&P 500 companies having reported
results so far, analysts expect a 12.7% fall in profits for the
first quarter and an even sharper decline of 37.8% for the
current quarter.
Still, aggressive stimulus measures and hopes of reopening
the economy from virus-induced curbs have helped the S&P 500
index .SPX post its best month in 33 years in April. The
benchmark index is now nearly 20% away from reclaiming a record
high hit in February.
At 1:38 p.m. ET the Dow Jones Industrial Average .DJI was
down 615.30 points, or 2.53%, at 23,730.42, the S&P 500 .SPX
was down 87.37 points, or 3.00%, at 2,825.06 and the Nasdaq
Composite .IXIC was down 314.84 points, or 3.54%, at 8,574.71.
United Airlines Holdings Inc UAL.O plunged 9.6% after
posting a first-quarter loss of $1.7 billion. Declining issues outnumbered advancers for a 7.29-to-1 ratio
on the NYSE and for a 6.39-to-1 ratio on the Nasdaq.
The S&P index recorded no new 52-week high and two new lows,
while the Nasdaq recorded 16 new highs and 10 new lows.