By Sruthi Shankar and Shreyashi Sanyal
(Reuters) - U.S. stocks fell on Tuesday after President Donald Trump threatened tariffs on European goods, while a cut in the IMF's global growth forecast fanned worries of a slowdown.
Trade-sensitive industrial stocks were among the worst hit, dropping 1.15%, followed by losses in energy, materials and financials.
Boeing Co shares fell 1.3% after the planemaker handed over far fewer planes in the first quarter due to a global grounding of its best-selling 737 MAX jets.
3M Co and Caterpillar Inc were down more than 1 percent each and also weighed on the Dow.
The United States threatened to slap tariffs on hundreds of European goods on Monday as retaliation for subsidies given to Airbus. An EU official said the European Union had begun preparations to retaliate.
In its third downgrade to global economic outlook since October, the International Monetary Fund (IMF) warned that growth could slow further due to trade tensions and a potentially disorderly exit of Britain from the European Union.
The outlook cut added to concerns about the upcoming earnings season, which may see its first quarterly contraction in profits since 2016.
"The IMF downgrade just shows that the odds of robust growth are not very high. It is also going to be difficult for the U.S. to maintain earnings growth especially if global growth is sluggish," said Craig Birk, chief investment officer at Personal Capital in San Francisco.
Earnings begin in earnest, with Delta Air Lines Inc reporting on Wednesday, followed by big U.S. banks later this week. January-March profit for S&P 500 companies is expected to fall 2.5% from last year, according to Refinitiv data.
"The market is looking at upcoming earnings as if they're hoping it will be better than feared or people will be dismissive of it because of so many variables to blame," Yousef Abbasi, INTL FCStone's global market strategist in New York.
Capping losses on the Nasdaq was a 1 percent gain in Apple Inc shares, which were on pace to close higher for a 10th straight day in their best such winning streak since October 2010.
At 12:56 p.m. ET, the Dow Jones Industrial Average was down 146.46 points, or 0.56%, at 26,194.56. The S&P 500 was down 11.62 points, or 0.40%, at 2,884.15 and the Nasdaq Composite was down 14.79 points, or 0.19 percent, at 7,939.09.
The Dow Jones transports index fell 0.77% and was on track to end a four-day run of gains.
The declines were led by a 1.8% drop in American Airlines Group Inc after the carrier trimmed its first-quarter revenue forecast, mainly due to the global grounding of Boeing's 737 MAX jets.
Of the 11 major S&P sectors, nine were lower. Energy stocks fell 0.70% as oil prices retreated from their five-month highs.
Pentair Plc shares tumbled 14.7%, the most on the S&P 500, after the water treatment company forecast full-year profit below expectations.
United States Steel Corp fell 8.2% after Credit Suisse downgraded the stock to "underperform".
Walt Disney Co rose 1.9% after Cowen and Co upgraded the company's stock to "outperform".
Declining issues outnumbered advancers for a 2.11-to-1 ratio on the NYSE and for a 1.71-to-1 ratio on the Nasdaq.
The S&P index recorded 17 new 52-week highs and no new low, while the Nasdaq recorded 42 new highs and 22 new lows.
(Reporting by Sruthi Shankar and Shreyashi Sanyal in Bengaluru; Editing by Anil D'Silva)
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Updated Date: Apr 10, 2019 00:05:24 IST