By Bansari Mayur Kamdar and Amruta Khandekar
(Reuters) - U.S. stock indexes slid on Monday, dragged lower by Apple, energy and bank shares, ahead of the first face-to-face peace talks between Ukraine and Russia in more than two weeks.
Oil majors Exxon (NYSE:XOM) and Chevron (NYSE:CVX) fell over 2% each, after crude prices tumbled more than 7% on rising fears about weaker fuel demand in China due to a surge in COVID-19 infections. [O/R]
Apple Inc (NASDAQ:AAPL) slipped 0.6%, weighing the most on the S&P 500 and the Nasdaq indexes, after a report said the company was planning to cut iPhone and AirPod output as rising inflation starts to weigh on demand for consumer electronics.
Strong economic data and gains in beaten-down growth stocks have powered Wall Street's main indexes in the recent days despite the Russia-Ukraine conflict and hawkish comments from Federal Reserve policymakers.
Banks declined 2.3% after a recent run-up on expectations that the Fed could push harder and faster to tame inflation running at four-decade highs. Morgan Stanley (NYSE:MS) downgraded U.S. banks, saying rate hikes have been priced in.
The moves in bond markets, however, suggested some investors were worried about the quicker rate hikes denting economic growth. One measure of the U.S. bond yield curve - the gap between five and 30-year Treasury yields - inverted for the first time since 2006.[US/]
"The fixed-income markets, being inverted in some parts of the yield curve, is saying that that's a valid concern that we are going into a recession. The equity markets, on the other hand, are not really responding in a similar fashion," said Keith Buchanan, portfolio manager at Globalt Investments in Atlanta.
"It is really a mixed session on the equity markets, after having a couple of weeks of positive gains. They're not screaming recession."
At 12:38 p.m. ET, the Dow Jones Industrial Average was down 248.41 points, or 0.71%, at 34,612.83, the S&P 500 was down 17.36 points, or 0.38%, at 4,525.70, and the Nasdaq Composite was down 27.33 points, or 0.19%, at 14,141.97.
Meanwhile, Ukraine and Russia said their delegations would arrive in Turkey for peace talks that are expected to take place on Tuesday. A senior U.S. official said Russian President Vladimir Putin did not appear ready to make compromises, with Ukrainian officials also playing down the chances of a major breakthrough at the talks.
Electric-car maker Tesla (NASDAQ:TSLA) jumped 6.7% after saying that it will seek investor approval to increase its number of shares to enable a stock split.
Poly soared 50.1% after HP Inc (NYSE:HPQ) said it would buy the audio and video products maker for $1.7 billion in cash. Shares of HP declined 2.4%.
Declining issues outnumbered advancers for a 2.08-to-1 ratio on the NYSE and for a 2.35-to-1 ratio on the Nasdaq.
The S&P index recorded 23 new 52-week highs and four new lows, while the Nasdaq recorded 34 new highs and 92 new lows.