US STOCKS-Wall Street tumbles as virus fears hit travel, growth stocks

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* Airlines, casino stocks down on concerns of travel demand
* Banks follow U.S. Treasury yields lower
* Crude slips below $60, energy shares down
* Indexes down: Dow 1.26%, S&P 1.28%, Nasdaq 1.58%

(Updates to early afternoon)
By Sruthi Shankar
Jan 27 (Reuters) - Wall Street's main indexes fell more than
1% on Monday as investors worried about the economic fallout of
a virus outbreak in China that has prompted the country to
extend the Lunar New Year holidays and businesses to close some
operations.
The benchmark S&P 500 was jolted off record highs last week
as China locked down several cities and curbed travel, reminding
investors of the deadly SARS virus that killed nearly 800 people
in 2002-03 and cost the global economy billions.
Travel-related stocks, including airlines, casinos and
hotels, were the worst-hit on Wall Street, while shares of
sectors exposed to China's growth, including technology,
materials and energy, pressured the markets.
"We'd a strong market heading into the year and there was a
little bit of over-confidence," said Jason Pride, chief
investment officer of private wealth at Glenmede in
Philadelphia.
"5-10% corrections are typical for any given year in equity
markets. Maybe this time around, there is a larger economic risk
posed by this outbreak because the epicentre of the outbreak
(China) is exactly the reason for concern from last year."
At 1:13 p.m. ET, the Dow Jones Industrial Average .DJI
fell 1.26% to 28,624.77.
The S&P 500 .SPX dropped 1.28% to 3,253.17 and the Nasdaq
Composite .IXIC declined 1.58% to 9,167.40. The indexes were
on track to post their biggest single-day percentage loss since
October.
Wall Street's fear gauge, the CBOE Volatility index .VIX ,
jumped to its highest since Oct. 10.
Technology and internet heavyweights that have powered the
recent rally including Apple Inc AAPL.O , Microsoft Corp
MSFT.O , Alphabet Inc GOOGL.O and Amazon.com Inc AMZN.O
dropped between 1.6% and 3%.
Wynn Resorts Ltd WYNN.O , Melco Resorts & Entertainment Ltd
MLCO.O and Las Vegas Sands Corp LVS.N , which have large
operations in China, slid between 3.7% and 7%. The NYSE Arca
Airline index .XAL dropped 3.8%.
Yum China Holdings Inc YUMC.N slid 4.3% after the company
said it had temporarily closed some of its KFC and Pizza Hut
stores in Wuhan, the epicentre of the outbreak. The death toll in China rose to 81 on Monday and a small
number of cases linked to people who travelled from Wuhan have
been confirmed in more than 10 countries, including Thailand,
France, Japan and the United States. The rush to safe haven assets sank U.S. Treasury yields to
three-month lows, putting pressure on lenders. The S&P 500 banks
index .SPXBK was down 1.0%. US/
The S&P energy index .SPNY dropped 2.4% as crude prices
fell below $60 per barrel on fears of slowing oil demand
following the outbreak. O/R
Defensive sectors such as consumer staples .SPLRCS , real
estate .SPLRCR , healthcare .SPXHC and utilities .SPLRCU
posted minimal losses.
Fourth-quarter earnings will kick into high gear this week
with 141 of the S&P 500 companies, including Apple, Microsoft
Corp MSFT.O and Boeing Co BA.N , expected to report.
No.1 U.S. homebuilder D.R. Horton Inc DHI.N rose 2.2%
after raising the upper end of its forecast for full-year home
sales. Declining issues outnumbered advancers for a 3.85-to-1 ratio
on the NYSE and a 2.69-to-1 ratio on the Nasdaq.
The S&P index recorded 17 new 52-week highs and 12 new lows,
while the Nasdaq recorded 30 new highs and 84 new lows.