US STOCKS-Wall Street falls as trade hopes wane

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* Trump says China deal could be delayed until election
* Dow posts worst day in nearly two months
* Trade-sensitive chip stocks have biggest loss since Oct 23
* Indexes drop: Dow 1.01%, S&P 0.66%, Nasdaq 0.55%

(Updates to market close)
By Stephen Culp
NEW YORK, Dec 3 (Reuters) - U.S. stocks sold off for a third
consecutive session on Tuesday after comments from President
Donald Trump and Commerce Secretary Wilbur Ross threw cold water
on hopes of a possible near-term respite from the
market-bruising U.S.-China trade war.
The blue-chip Dow had its worst day since Oct. 8, and all
three major stock indexes backed further away from last week's
record highs that were fueled by optimism that an interim deal
between the United States and China was in the works.
That optimism was dampened as Trump suggested a deal might
have to wait until after the 2020 election, and separately, Ross
confirmed that new tariffs on Chinese imports would take effect
on Dec. 15 as scheduled, unless substantial progress was made.
Those remarks, on the heels of France's threatened
retaliation over potential new U.S. duties on French products,
itself a retaliation against a proposed French "digital tax,"
suggested that America's hydra-headed tariff war against its
major trading partners would continue to dominate markets for
the foreseeable future. "The setback in the Chinese trade negotiations, coupled with
tariffs on the French with regard to the digital tax and tariffs
on Brazil and Argentina for steel, when you add that up it was
disappointing to the markets," said Stephen Massocca, senior
vice president at Wedbush Securities in San Francisco.
"The long-term impact of these negotiations could very well
be positive, but the short-term implication portends a slowing
of the economy and that's not viewed well by the markets,"
Massocca added.
Tariff-sensitive chipmakers fell, with the Philadelphia SE
Semiconductor index dropping 1.5%, its worst day since Oct. 23.
The Dow Jones Industrial Average .DJI fell 280.23 points,
or 1.01%, to 27,502.81, the S&P 500 .SPX lost 20.67 points, or
0.66%, to 3,093.2 and the Nasdaq Composite .IXIC dropped 47.34
points, or 0.55%, to 8,520.64.
Nine of the 11 major sectors in the S&P 500 were in negative
territory, with Apple Inc AAPL.O and Intel Corp INTC.O
weighing the most.
Energy .SPNY , financial .SPSY and trade-vulnerable
industrial .SPLRCI stocks suffered the largest percentage
losses.
Shares of AK Steel Holding Corp AKS.N rose 4.2% after
miner Cleveland Cliffs CLF.N agreed to buy the company in an
all-stock deal worth about $1.1 billion. Audentes Therapeutics Inc's BOLD.O shares soared 106.0%
after Japan's Astellas Pharma Inc 4503.T said it would buy the
U.S. drugmaker for about $3 billion in cash. Declining issues outnumbered advancing ones on the NYSE by a
1.63-to-1 ratio; on Nasdaq, a 1.65-to-1 ratio favored decliners.
The S&P 500 posted 2 new 52-week highs and 6 new lows; the
Nasdaq Composite recorded 40 new highs and 76 new lows.
Volume on U.S. exchanges was 7.41 billion shares, compared
with the 6.83 billion average over the last 20 trading days.