By April Joyner
NEW YORK (Reuters) - Wall Street stocks sank more than 1 percent on Thursday as worries that the United States and China would not be able to reach a trade deal intensified earlier concerns about slowing global economic growth.
President Donald Trump and Chinese President Xi Jinping were unlikely to meet by an early March deadline set by the two countries for reaching a deal, two U.S. administration officials and a source familiar with the negotiations said.
That news came after White House adviser Larry Kudlow told Fox Business Network there was a "pretty sizable distance" between the countries, which are set to resume discussions in Beijing next week.
"Any concern that the stalemate won't be overcome by China and the U.S. is going to create negative sentiment for the markets just because trade is the single largest overhang," said Mike Loewengart, vice-president of investment strategy at E*Trade Financial in New York.
Among the S&P 500's major sectors, only the defensive utilities and real estate indexes were positive, illustrating Thursday's risk-off sentiment.
The Philadelphia SE Semiconductor Index tumbled 2.7 percent. Chipmakers get a large chunk of their revenue from Chinese customers.
Wall Street had already been under pressure after the European Commission slashed its euro zone growth forecasts for 2019 and 2020 due to an expected slowdown in the largest countries of the bloc, partly on trade tensions.
"There's a resurfacing of global growth fears, which has pushed U.S. stocks down," said Veronica Willis, investment strategy analyst at Wells Fargo (NYSE:WFC) Investment Institute in St. Louis. "There are still some concerns surrounding trade, and I think those issues will linger for some time."
Disappointing financial forecasts from several U.S. companies, including Twitter Inc (NYSE:TWTR), have also given investors pause.
More than half of S&P 500 companies have reported fourth-quarter results, with about 71 percent beating profit estimates, according to IBES data from Refinitiv. However, current-quarter earnings growth estimates have shrunk to 0.1 percent from 5.3 percent at the start of the year.
The Dow Jones Industrial Average fell 285.26 points, or 1.12 percent, to 25,105.04, the S&P 500 lost 34.55 points, or 1.26 percent, to 2,697.06 and the Nasdaq Composite dropped 105.41 points, or 1.43 percent, to 7,269.87.
Energy stocks fell 2.3 percent, the largest percentage drop among S&P 500 sectors, as crude prices sank on worries of tapering demand as a result of trade tensions.
Twitter shares tumbled 9.6 percent after the social media company forecasted that revenue in the first quarter would be weaker than expected and that its full-year operating costs would rise.
SunTrust Banks Inc (NYSE:STI) shares jumped 8.8 percent after the bank agreed to be bought for about $28 billion in stock by fellow regional lender BB&T Corp (NYSE:BBT), whose shares rose 2.6 percent.
The prospects of further deals sparked gains in other regional banks, although a drop in the large Wall Street lenders led to declines in the S&P 500 banks and financials indexes.
Declining issues outnumbered advancing ones on the NYSE by a 2.74-to-1 ratio; on Nasdaq, a 2.37-to-1 ratio favored decliners.
The S&P 500 posted 11 new 52-week highs and two new lows; the Nasdaq Composite recorded 29 new highs and 27 new lows.