US STOCKS-Wall St drops as tech stocks tumble on Huawei fallout fears

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* Apple, tech stocks drop as U.S.-China trade tensions mount
* Top chipmakers to not supply Huawei - report
* Nine of 11 major S&P sectors trading lower
* Indexes fall: Dow 0.51%, S&P 0.73%, Nasdaq 1.61%

(Updates to open)
By Shreyashi Sanyal
May 20 (Reuters) - U.S. stocks fell on Monday, as a
crackdown on China's Huawei Technologies raised concerns of a
bigger impact on chipmakers and added to fears of an escalation
in trade war between the two nations.
Apple Inc AAPL.O slumped 3.84%, weighing the most on the
three main indexes. The S&P 500 technology sector .SPLRCT
slipped 1.95%, the biggest drop among the nine major S&P sectors
trading lower.
The iPhone maker was also pressured by a warning from HSBC
that higher prices for the company's products following the
increases in tariffs could have "dire consequences" on demand.
U.S. suppliers of Huawei HWT.UL , including Qualcomm
QCOM.O , Micron Technology MU.O and Broadcom Inc AVGO.O ,
fell about 5%, while the Philadelphia Semiconductor Index .SOX
slid 2.88%, its lowest level in over two months.
"For a lot of these tech companies, there is no bigger
market than China and there is some concern it could forestall
growth, also forces countries to take sides and begin to allow
China to develop alternatives," said Rick Meckler, partner at
Cherry Lane Investments in New Vernon, New Jersey.
"It's a lot of speculation and there isn't any basis. But it
looks like the trade talks are getting worse and not better."
Huawei, the world's largest telecoms equipment maker, was
added to a trade blacklist by the Trump administration on
Thursday, escalating the already bitter trade war, while China
on Monday accused the United States of harboring "extravagant
expectations" for a trade deal. Underscoring a likely hit to U.S. tech companies, Lumentum
Holdings Inc LITE.O said it would halt shipments to Huawei and
cut its quarterly revenue expectations. Shares of Lumentum fell
2.68%.
Alphabet Inc's GOOGL.O Google has suspended some business
with Huawei, Reuters reported over the weekend, while
chipmakers including Intel Corp INTC.O , Qualcomm, Xilinx Inc
XLNX.O and Broadcom have told employees that they will not
supply the Chinese company until further notice, Bloomberg
reported on Sunday. Shares of Alphabet, Facebook Inc FB.O and Microsoft Corp
MSFT.O were all down over 2%.
In a bright spot, Sprint Corp S.N shares jumped 23%, while
T-Mobile US Inc TMUS.O gained 5.2% after the companies won
support of the U.S. telecoms regulator chairman for their
proposed $26 billion merger.
Verizon Communications Inc's VZ.N 3.5% gain helped the Dow
index limit some losses, while shares of AT&T Inc T.N rose 3%
At 9:45 a.m. ET, the Dow Jones Industrial Average .DJI was
down 132.17 points, or 0.51%, at 25,631.83. The S&P 500 .SPX
was down 20.89 points, or 0.73%, at 2,838.64 and the Nasdaq
Composite .IXIC was down 125.77 points, or 1.61%, at 7,690.51.
Investors will also look for comments from a clutch of
retailers reporting this week including Home Depot HD.N ,
Nordstrom JWN.N , Kohl's KSS.N and Target TGT.N for
comments on the impact of the latest round of tariffs.
With 460 of S&P 500 companies having posted first-quarter
results, 75.2% have topped analysts' profit expectations.
Analysts now expect first-quarter earnings growth of 1.4%, a
sharp turnaround from the 2% loss expected on April 1, according
to Refinitiv data.
Declining issues outnumbered advancers for a 2.58-to-1 ratio
on the NYSE and for a 3.00-to-1 ratio on the Nasdaq.
The S&P index recorded 13 new 52-week highs and seven new
lows, while the Nasdaq recorded 11 new highs and 71 new lows.