US STOCKS-Wall Street closes lower on fears of a slowing economy

* Nike hits record high after stellar quarter
* Energy stocks lead declines
* Tesla tumbles as 'Battery Day' disappoints

(Updates to Wall Street close)
By Herbert Lash
Sept 23 (Reuters) - Wall Street's main indexes fell sharply
on Wednesday after data showing a cooling of U.S. business
activity and the stalemate in Congress over more fiscal stimulus
heightened concerns about the economy while the coronavirus
pandemic remains unchecked.
The Nasdaq and S&P 500 fell more than 2%, and all 11 of the
major S&P sectors closed lower. Energy .SPNY - already the
worst-performing sector this year - led the decline. O/R
Hopes of a strong recovery and historic stimulus fueled the
U.S. stock rally following the coronavirus-driven crash in
March. But doubts over another relief bill and a sell-off in
heavyweight technology-related stocks have weighed on sentiment
since the market peaked on Sept. 2.
The economy is leveling off at about 80% of activity before
the pandemic and won't get back to normal until a vaccine is in
place, said Jason Pride, chief investment officer of private
wealth at Glenmede in Philadelphia.
"We're at that phase where it's harder to get that next bit
of the recovery, that next bit of the reopening in place," Pride
said. "We're still doing it, but the progress is way slower than
it was in the first three months of the reopening."
Investors are struggling to understand where to invest with
mega-cap tech stocks overvalued, but the deep-value stocks
represent maturing industries, such as energy and brick-an-
mortar banks, he said.
"We're spending more of our time in that sweet spot in the
middle to get away from the extremes of growth," Pride said.
Federal Reserve Chair Jerome Powell said on Wednesday that
the central bank was not planning any "major" changes to its
Main Street Lending Program, while saying that both the Fed and
Congress need to "stay with it" in working to bolster the
economic recovery. "The longer we go without more stimulus, the harder it will
be to sustain the gains in the economy," said Willie Delwiche,
investment strategist at Baird in Milwaukee.
Data from IHS Markit showed gains at factories were offset
by a slowdown in the broader services sector in September,
suggesting a loss of momentum in the economy at a time when
concerns are rising about a potential surge in COVID-19 cases
heading into the colder months. Meanwhile, the U.S. Justice Department unveiled a
legislative proposal, which would need congressional approval,
that seeks to reform a legal immunity for internet companies and
follows through on President Donald Trump's bid from earlier
this year to crack down on tech giants. Wall Street favorites including Apple Inc AAPL.O ,
Google-parent Alphabet Inc GOOGL.L and Amazon.com Inc
AMZN.O , which have borne the brunt of recent losses, again
declined at a rate exceeding losses of the benchmark S&P 500. A
decline in Facebook Inc FB.O came in below the S&P drop.
Tesla Inc TSLA.O , another recent Wall Street darling,
tumbled after Chief Executive Elon Musk failed to impress with
his promise to cut electric vehicle costs at the company's
much-awaited "Battery Day" event on Tuesday. Unofficially, the Dow Jones Industrial Average .DJI fell
523.93 points, or 1.92%, to 26,764.25, the S&P 500 .SPX lost
78.58 points, or 2.37%, to 3,236.99, and the Nasdaq Composite
.IXIC dropped 330.65 points, or 3.02%, to 10,632.99.
Nike Inc NKE.N surged to a record high as its digital
sales, especially in North America, helped offset a fall in
sales at traditional brick-and-mortar stores.