US STOCKS-Wall St drops on trade worries, Fed Chair Powell's speech

* Markets dip, then recover following Fed Chair Powell's
speech
* Tech leads all three major U.S. indexes lower
* Allergan jumps on AbbVie's $63 bln purchase announcement
* Indexes down: Dow 0.43%, S&P 0.59%, Nasdaq 1.00%

(Updates to late afternoon)
By Stephen Culp
NEW YORK, June 25 (Reuters) - Wall Street lost ground on
Tuesday as simmering trade concerns, combined with disappointing
economic data, sent buyers to the sidelines, where they remained
after Federal Reserve Chair Jerome Powell pushed back on
pressure from President Donald Trump to cut rates.
All three major U.S. stock indexes were in the red, weighed
most heavily by technology stocks, after Powell said the Fed was
grappling with whether trade uncertainties and other issues
support interest rate cuts.
Powell, speaking at the Council on Foreign relations, also
reiterated the Fed's independence, a day after Trump tweeted
that the Fed "doesn't know what it's doing." Earlier, St. Louis Federal Reserve Bank President James
Bullard in an interview with Bloomberg said he does not think
the Fed needs to cut rates by a half-percentage point at its
next policy meeting, in late July. "You had a one-two punch," said Art Hogan, chief market
strategist at National Securities in New York. "Powell came out
and warned against policy bending to short-term political
interests, but it is also Bullard, who is a dissenter, saying 50
basis points would be too much."
Bullard last week said he had dissented at the Fed's June
policy meeting because he felt that weak inflation and
uncertainties about the economic outlook warranted a rate
cut. Despite Tuesday's sell-off, June is shaping up to be a good
month for U.S. equities. The benchmark S&P 500 continued to
hover within a percent of the all-time high reached last
Thursday.
Still, anxieties stemming from the U.S.-China trade war
found no relief in a White House official's remarks that Trump
is "comfortable with any outcome" arising from a planned meeting
with Chinese President Xi Jinping at the Group of 20 summit
convening in Japan on Friday. "The market...is really looking at two issues that push it
higher," said Rick Meckler, partner at Cherry Lane Investments
in New Vernon, New Jersey. "One is the trade agreement and the
other is Fed policy. It's really trade policy that's going to be
more meaningful."
On the economic front, sales of newly constructed homes and
consumer confidence numbers both came in well below economist
expectations, according to separate reports from the U.S.
Commerce Department and the Conference Board. Growing signs of economic softness, especially related to
the trade disputes between the United States and its major
trading partners, contributed to the Federal Reserve's last week
signaling that interest rate cuts could begin as early as July.
The Dow Jones Industrial Average .DJI fell 114.25 points,
or 0.43%, to 26,613.29, the S&P 500 .SPX lost 17.36 points, or
0.59%, to 2,927.99 and the Nasdaq Composite .IXIC dropped
80.27 points, or 1%, to 7,925.42.
Of the 11 major indexes in the S&P 500, 10 were in negative
territory, with technology .SPLRCT and communications services
.SPLRCL seeing the biggest percentage drops.
Rate-sensitive bank stocks .SPXBK were down 0.2%, as U.S.
Treasuries benchmark yields US10YT=RR fell below the closely
watched 2% level.
AbbVie Inc ABBV.K said it would buy Allergan Plc AGN.N
for about $63 billion, sending the Botox maker's shares up by
26.9%. AbbVie's stock dropped 15.4%. Declining issues outnumbered advancing ones on the NYSE by a
1.37-to-1 ratio; on Nasdaq, a 1.29-to-1 ratio favored decliners.
The S&P 500 posted 30 new 52-week highs and five new lows;
the Nasdaq Composite recorded 22 new highs and 79 new lows.