US STOCKS-Wall St tumbles on fears of new virus wave, Fed's cautious outlook

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* Airlines, cruise operators, casinos fall
* Banks extend slide as Fed sees rates near zero until 2022
* Boeing supplier Spirit drops
* Indexes fall: Dow 3.68%, S&P 3.07%, Nasdaq 2.17%

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By Medha Singh and Devik Jain
June 11 (Reuters) - U.S. stocks slumped on Thursday with the
S&P 500 and the Dow set for their steepest percentage declines
since April 1, as investors fretted over a new wave of
coronavirus infections and a gloomy economic forecast from the
Federal Reserve.
The three main U.S. stocks indexes were trading at a
one-week low as new coronavirus cases rose in the United States
after five weeks of declines, according to a Reuters
analysis. All major S&P sectors were deep in the red with financial
.SPSY , energy .SPNY and material .SPLRCM sectors, that
track economic growth, posting the biggest declines.
Wall Street's fear gauge, the CBOE volatility index .VIX ,
rose to 32 points, its highest level since May 15.
The easing of lockdowns and a massive stimulus program to
help the economy bounce back quickly to pre-pandemic levels have
been pivotal in helping the three main indexes recover about 40%
from a deep, virus-induced selloff.
"We're actually going to have a W-shaped recovery," said
Chad Oviatt, director of investment management for Huntington
Private Bank in Columbus, Ohio. "Markets are dealing with the
fact that we now have an elongated recovery period."
The S&P 500 .SPX and the Dow Jones .DJI indexes ended
lower on Wednesday after Fed Chair Jerome Powell acknowledged it
could take years for the millions of people laid off due to
COVID-19 to get back to work, even as he reiterated his promise
to support the virus-hit economy. A Labor Department report showed about 1.54 million people
applied for state unemployment benefits for the week ended June
6, roughly in line with estimates. Boeing Co BA.N shed 9.1% after its top supplier Spirit
AeroSystems Holdings Inc SPR.N announced a 21-day layoff for
staff doing production and support work for Boeing's 737
program. Spirit AeroSystems tumbled 12.1%. At 11:23 a.m. ET, the Dow Jones Industrial Average .DJI
was down 992.42 points, or 3.68%, at 25,997.57, the S&P 500
.SPX was down 98.04 points, or 3.07%, at 3,092.10. The Nasdaq
Composite .IXIC was down 217.44 points, or 2.17%, at 9,802.91.
Shares of banks .SPXBK , which tend to benefit in a higher
rate environment, slipped 6.6%, extending losses after Fed
policymakers saw key overnight interest rates remaining near
zero through at least 2022. Shares of airlines and cruise operators were some of the
biggest percentage losers on the S&P 500.
The S&P 1500 airlines index .SPCOMAIR tumbled 9.2%, while
Norwegian Cruise Line Holdings Ltd NCLH.N and Royal Caribbean
Cruises Ltd RCL.N slumped 13.6% and 8.2%, respectively.
Declining issues outnumbered advancers for a 15.18-to-1
ratio on the NYSE and a 10.29-to-1 ratio on the Nasdaq.
The S&P index recorded four new 52-week highs and no new
low, while the Nasdaq recorded 15 new highs and five new lows.