US STOCKS-Trade, global growth worries slam Wall Street

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* Technology shares drag the main indexes lower
* Energy stocks mirror slump in oil prices
* L Brands jumps after quarterly earnings beat
* Indexes fall: Dow 1.71%, S&P 1.72%, Nasdaq 2.09%

(Updates to early afternoon)
By Shreyashi Sanyal and Sruthi Shankar
May 23 (Reuters) - U.S. stock indexes slumped 2% on
Thursday, as investors dumped technology, industrial and energy
stocks on fears that a spiraling trade war between the United
States and China would shackle global growth.
Technology .SPLRCT , among sectors most exposed to China,
was the hardest hit. Microsoft Corp MSFT.O and Apple Inc
AAPL.O were the biggest drags, while the chip index .SOX
dropped 2.79%.
Oil prices plunged over 5% as trade fears dampened the
demand outlook, leaving the energy index .SPNY down 3.72%, the
biggest decliner among the major 11 S&P sectors.
Materials, financials and consumer discretionary sectors
also posted losses of about 2% in a broad-based decline.
"Investors realize that coming to a deal is going to be more
challenging and that is really harmful to the economic
environment," said Luke Tilley, chief economist at Wilmington
Trust in Wilmington, Delaware.
"It's a classic risk-off movement where you've got the
higher-bated sectors such as financials, industrials and
technology selling off the most."
Only the defensive utilities sector .SPLRCU was up 0.22%,
while real estate .SPLRCR was flat.
U.S. Treasury yields dropped, and two yield curve indicators
briefly inverted on Thursday, sending the banking index .SPXBK
down 2.35%. US/
Beijing said on Thursday Washington needs to correct its
"wrong actions" for trade talks to continue after the United
States blacklisted Huawei Technology Co Ltd HWT.UL last week.

In further evidence of the trade war hitting the U.S.
economy, data from IHS Markit showed manufacturing growth
measured its weakest pace of activity in nearly a decade and new
orders fell for the first time since August 2009. At 13:01 p.m. ET, the Dow Jones Industrial Average .DJI
was down 441.25 points, or 1.71%, at 25,335.36. The S&P 500
.SPX was down 49.14 points, or 1.72%, at 2,807.13 and the
Nasdaq Composite .IXIC was down 162.01 points, or 2.09%, at
7,588.83.
The newest round of U.S. tariffs on Chinese imports will
cost the typical American household $831 annually, according to
a Federal Reserve Bank of New York research. Stocks have succumbed to selling pressure in May after
Washington and Beijing engaged in tit-for-tat tariffs and other
retaliatory measures, with the S&P 500 on track to post its
worst monthly decline since the December sell-off.
Among other stocks, NetApp Inc NTAP.O tumbled 10.9%, the
most on the S&P 500, after the data storage equipment maker
forecast current-quarter profit and revenue below Wall Street
estimates.
L Brands Inc LB.N jumped 11.6% after the retailer reported
better-than-expected quarterly earnings.
Declining issues outnumbered advancers for a 4.40-to-1 ratio
on the NYSE and a 4.75-to-1 ratio on the Nasdaq.
The S&P index recorded 23 new 52-week highs and 25 new lows,
while the Nasdaq recorded 18 new highs and 159 new lows.