US STOCKS-Wall St tumbles on concerns over U.S.-China trade deal, rising virus cases

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* Nike falls after surprise quarterly loss
* U.S. lenders slip as Fed caps shareholder payout
* Facebook biggest drag on S&P 500 and Nasdaq
* Indexes fall: Dow 2.32%, S&P 1.95%, Nasdaq 1.95%

(Updates to early afternoon)
By Medha Singh and Devik Jain
June 26 (Reuters) - Wall Street's major indexes tumbled on
Friday after a report that the U.S. intervention in Chinese
interests could risk Phase 1 trade deal spooked investors
already worried about a surge in coronavirus cases.
The three main indexes extended losses after the Wall Street
Journal said U.S. 'meddling' in Hong Kong, Taiwan, other matters
could jeopardize Chinese goods purchases under the trade deal.
Many U.S. states that were spared the burnt of the initial
outbreak or moved early to lift movement restrictions are seeing
a resurgence in new infections, with Texas and Florida ordering
bars to close down again on Friday. "Markets are very much headline driven. We've had a very big
run for the quarter and there's definitely some reason to take
profits and they're using Florida and Texas numbers to do that,"
said Bob Shea, chief executive officer at TrimTabs Asset
Management in New York.
A resurgence in cases has threatened to derail a strong
rally for Wall Street that has brought the S&P 500 within 11% of
its February all-time high.
The benchmark index is on pace for its best quarterly
performance in more than two decades, powered by massive
stimulus measures.
The S&P 500 was also testing its the 200-day moving average,
an indicator of long-term momentum. If it closes below the key
level, it could signal further losses.
At 12:42 p.m. ET, the Dow Jones Industrial Average .DJI
was down 597.50 points, or 2.32%, at 25,148.10, the S&P 500
.SPX was down 60.10 points, or 1.95%, at 3,023.66. The Nasdaq
Composite .IXIC was down 195.70 points, or 1.95%, at 9,821.31.
Facebook Inc FB.O shed 7.8%, weighing the most on the S&P
500 and Nasdaq after Verizon Communications Inc VZ.N joined an
advertising boycott that called out the social media giant for
not doing enough to stop hate speech on its platforms.

The S&P 500 banks sub-index .SPXBK shed 5.6% after the
Federal Reserve limited dividend payments and barred share
repurchases until at least the fourth quarter following its
annual stress test. Nike Inc NKE.N dropped 6.5% as the footwear maker posted a
surprise quarterly loss, hurt by store closures due to the
pandemic. Gap Inc GPS.N surged 28.1% after it entered into a 10-year
deal with rapper and fashion designer Kanye West to create a
Yeezy line of clothing. Friday also marks the reconstitution of the FTSE Russell
indexes, including large cap Russell 1000 .RUI and small cap
Russell 2000 .RUT , that often marks one of the biggest trading
volume days of the year.
Declining issues outnumbered advancers for a 4.88-to-1 ratio
on the NYSE and a 4.36-to-1 ratio on the Nasdaq.
The S&P index recorded five new 52-week highs and no new
low, while the Nasdaq recorded 45 new highs and 21 new lows.