US STOCKS-Wall Street slumps on virus worries, grim economic forecast

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* Cyclicals stocks lead losses among S&P sectors
* Carnival's credit rating cut to junk status by S&P
* Dell jumps on report of spinning off VMware stake
* Indexes down: Dow 1.95%, S&P 1.78%, Nasdaq 1.34%

(Adds comment, details; updates prices)
By Medha Singh and Devik Jain
June 24 (Reuters) - Wall Street's three major indexes
tumbled on Wednesday as investors weighed the risk to domestic
economy from rising coronavirus cases and a worsening forecast
of the damage from the pandemic.
Washington state made face masks mandatory in public places,
while many other U.S. states saw record cases, including Arizona
and Texas, where restrictions meant to slow the spread of the
disease were lifted early.
The top U.S. infectious disease official Anthony Fauci has
said the next two weeks could be critical in containing the
outbreak. The International Monetary Fund said the pandemic was
causing wider and deeper damage to economic activity than first
thought, prompting it to slash its 2020 global output forecasts
further to 4.9% from 3.0%. Advanced economies have been particularly hard hit, with
U.S. output now expected to shrink 8.0%, more than 2 percentage
points worse than the April forecast.
"People are feeling incrementally negative about new
coronavirus cases both in the United States and the world. It's
the summer and in fall we have the flu and with the COVID-19
going on it's a significant concern," said Elliot Savage,
portfolio manager of the YCG Enhanced Fund.
Wall Street's fear gauge, the CBOE volatility index .VIX ,
rose 3.4 points to 34.74.
A slate of better-than-feared economic reports, easing
lockdowns and massive stimulus measures have powered the Nasdaq
to an all-time high and put the benchmark S&P 500 on track for
its best quarterly performance since 1975.
The S&P 500 and Dow Jones Industrials .DJI are just about
8% and 13% from their respective February record closing highs.
At 10:58 a.m. ET, the Dow Jones Industrial Average .DJI
was down 511.17 points, or 1.95%, at 25,644.93, the S&P 500
.SPX was down 55.89 points, or 1.78%, at 3,075.40. The Nasdaq
Composite .IXIC was down 136.26 points, or 1.34%, at 9,995.11.
Battered U.S. airlines, resorts and cruise operators fell
again, with the S&P 1500 airlines index down 5.1%. Royal
Caribbean Cruises Ltd RCL.N slided 9.5% and Norwegian Cruise
Line Holdings Ltd NCLH.N 10.3%.
Carnival Corp CCL.N also declined 9.3% as ratings agency
Standard & Poor's downgraded its bonds to junk status,
forecasting continued weak demand for the cruise industry.
Bank stocks .SPXBK , which tend to outperform when the
outlook for the economy improves, slipped about 2.9%.
On the other hand, Dell Technologies Inc DELL.N jumped
7.4% after a report said the company was considering spinning
off its roughly $50 billion stake in cloud computing software
maker VMware Inc VMW.N . VMware advanced 3.2%.
Declining issues outnumbered advancers for a 7.50-to-1 ratio
on the NYSE and for a 4.78-to-1 ratio on the Nasdaq.
The S&P index recorded one new 52-week highs and no new
lows, while the Nasdaq recorded 34 new highs and four new lows.