(Adds close of U.S. markets)
* Wall Street falls on tech plunge, Trump attacks Amazon again
* Dollar slides as China-U.S. trade dispute escalates
* Oil falls below $68 as rally fizzles
* Major European markets shut for Easter Monday
By Herbert Lash
NEW YORK, April 2 (Reuters) - The dollar slid on Monday as China raised tariffs on U.S. goods in an escalating spat between the world's two biggest economies while stocks on Wall Street tumbled, led by a rout in technology shares, after President Donald Trump again attacked Amazon.com.
China bumped up tariffs by as much as 25 percent on 128 U.S. products, from frozen pork and wine to fruits and nuts, in response to U.S. duties on imports of aluminum and steel. snapped a three-session losing streak and the dollar fell after the tariffs, which are due to take effect on Monday, were announced late Sunday by China's finance ministry.
The three major U.S. stock indexes fell more than 2 percent each as the rout wiped out the tech-heavy Nasdaq index's gains for the year and sent the benchmark S&P 500 crashing through its 200-day moving average, a closely watched technical indicator.
It was the first time the index closed below its 200-day moving average since June 2016 in the wake of Britain's decision to leave the European Union, known as Brexit.
Trading was light as major European markets closed for Easter Monday. Markets in Australia and Hong Kong also were shut.
Shares of Amazon AMZN.O , Microsoft MSFT.O , Intel INTC.O and Facebook FB.O were the biggest drag on MSCI's all-country world stock index .MIWD00000PUS , which fell 1.23 percent.
The four companies also were the biggest weights on the benchmark S&P 500 index as it broke through its 200-day moving average after threatening to do so the past five sessions.
"It's a technical breakdown. A house catches on fire, it burns rather quickly and that is what is happening now," said Peter Cardillo, chief market economist at First Standard Financial in New York.
"Until we get to the earnings season, this market is going to shed more pain," he said, referring to first-quarter corporate results that will begin in earnest in two weeks.
Nicholas Colas, co-founder of Datatrek Research in New York, said there was a "reset" on how much exposure to technology shares investors are willing to bear.
"This is still primarily a tech-led sell-off and what we've learned over the past two weeks is just how overweight investors were in technology," Colas said.
The Dow Jones Industrial Average .DJI closed down 458.92 points, or 1.9 percent, to 23,644.19. The S&P 500 .SPX lost 58.99 points, or 2.23 percent, to 2,581.88 and the Nasdaq Composite .IXIC dropped 193.33 points, or 2.74 percent, to 6,870.12.
The Dow is now down 4.4 percent for the year, the S&P 500 is off 3.4 percent and the Nasdaq 0.48 percent.
The tariff announcement from China was not new and was not bearish but is an ongoing uncertainty, said Thomas Martin, senior portfolio manager at Globalt Investments in Atlanta.
"What you're seeing in the market is a change in leadership," he said.
Trump's comments on Amazon weighed on equities but further news on U.S.-China trade expected this week has drawn investor interest, said Jeffrey Kleintop, chief global investment strategist at Charles Schwab (NYSE:SCHW) & Co Inc in Boston.
"Everybody is bracing for that," Kleintop said of expected U.S. tariffs on $50 billion to $60 billion a year of imports from China that will likely intensify U.S.-China tensions.
The Trump administration will unveil by Friday a list of advanced technology Chinese imports targeted for U.S. tariffs to punish Beijing over technology transfer policies. stock fell 5.2 percent after Trump attacked the online retailer over the pricing of its deliveries through the U.S. postal system and promised unspecified changes. fools, or worse, are saying that our money-losing Post Office makes money with Amazon," Trump tweeted.
Intel shares closed down 6.1 percent after Bloomberg reported Apple (NASDAQ:AAPL) is planning to use its own chips in Mac computers beginning in 2020. dollar fell for a second straight session.
The dollar index .DXY fell 0.13 percent, with the euro EUR= down 0.16 percent to $1.2301. The Japanese yen JPY= firmed 0.31 percent versus the greenback at 105.94 per dollar.
Oil fell more than 2 percent, pressured by a rise in Russian production, expectations that Saudi Arabia will cut prices of the crude it sends to Asia, and a deepening trade spat between China and the United States.
Brent crude LCOc1 fell $1.70 to settle $67.64 a barrel. U.S. crude CLc1 settled down $1.93 at $63.01.
U.S. drillers cut seven oil rigs in the week to March 29, bringing the total down to 797, the first decline in three weeks. The rig count is closely watched as an indicator of future U.S. oil output.
U.S. Treasury prices rose, with benchmark 10-year notes US10YT=RR up 1/32 in price, pushing yields down to 2.7407 percent.
Gold, which is often seen as a store of value during times of financial or political uncertainty, rose.
U.S. gold futures GCcv1 for June delivery settled up $19.60 at $1,346.90 per ounce.