US STOCKS-Wall St slips on trade concerns, muted rate cut hopes

* Nine of 11 S&P sectors lower led by industrials
* 3M falls after RBC downgrade
* Focus on Fed press meet on banks stress test
* Indexes down: Dow 0.28%, S&P 0.23%, Nasdaq 0.13%

(Updates to open)
By Medha Singh
July 9 (Reuters) - U.S. stocks dropped on Tuesday as
investors fretted over a hit to company earnings from the
protracted U.S.-China trade dispute and reined in expectations
of a big interest rate cut by the Federal Reserve later this
month.
In the latest indication of the trade dispute hurting
businesses, German chemicals giant BASF BASFn.DE warned of a
30% fall in adjusted annual profit, while RBC Capital Markets
downgraded 3M Co MMM.N to "sector perform", citing macro
pressures from China, auto and electronics sectors. The industrial conglomerate's shares fell 1.4% and pulled
down the S&P industrial sector .SPLRCI 0.45%, the most among
nine of the 11 major S&P sectors trading lower.
China-exposed stocks slipped. Boeing Co BA.N , the single
largest U.S. exporter to China, dipped 0.3% ahead of release of
its orders and deliveries for the second quarter, while
Caterpillar Inc CAT.N declined 0.5%.
The Philadelphia chip index .SOX edged 0.21% lower, as
chipmakers, which get a large chunk of their revenue from China,
fell.
Stocks have retreated from their record closing highs since
a robust June jobs report on Friday tempered expectations of an
aggressive 50 basis point rate cut by the Fed.
"There is certainly nervousness over ... the fact that no
(trade) agreement has been reached nor seems that close and that
the recent jobs report calls into question how quickly the Fed
is likely to lower rates," said Rick Meckler, partner, Cherry
Lane Investments in New Vernon, New Jersey.
"Without the two items being favorably resolved, it's hard
for the market to push to even higher levels when it has gained
already so much this year."
The United States and China are set to relaunch trade talks
this week after a two-month hiatus, but a year after their trade
war began there is little sign their differences have narrowed.
Focus this week will be on Fed chief Jerome Powell's remarks
at his two-day testimony before the Congress, starting
Wednesday. Also due on Wednesday is the central bank's June
policy meeting minutes.
At 9:37 a.m. ET, the Dow Jones Industrial Average .DJI was
down 74.98 points, or 0.28%, at 26,731.16. The S&P 500 .SPX
was down 6.77 points, or 0.23%, at 2,969.18 and the Nasdaq
Composite .IXIC was down 10.23 points, or 0.13%, at 8,088.16.
Banking stocks .SPXBK were down 0.29% ahead of a
conference by the Fed to discuss the effectiveness of its stress
tests for large lenders.
Network gear maker Cisco Systems Inc CSCO.O slipped 0.4%
on a deal to buy optical component maker Acacia Communications
Inc ACIA.O for $2.84 billion in cash. Acacia's shares soared
34.9%. Second-quarter earnings season is expected to start in
earnest next week, where profits at S&P 500 companies are set to
dip 0.2% from a year earlier, according to Refinitiv IBES data.
Declining issues outnumbered advancers for a 2.47-to-1 ratio
on the NYSE and for a 1.70-to-1 ratio on the Nasdaq.
The S&P index recorded seven new 52-week highs and no new
low, while the Nasdaq recorded 10 new highs and 14 new lows.