* Dow, S&P slip below 200-day moving averages
* Breakthrough seen highly unlikely in US-China trade talks
* Tesla sinks after Musk snubs analysts’ questions on call
* Indexes down: Dow 1.47 pct, S&P 1.37 pct, Nasdaq 1.35 pct
* All 11 major indexes down, led by financials (Changes comment, adds details, updates prices)
By Sruthi Shankar
May 3 (Reuters) - Major U.S. indexes fell more than 1 percent in a broad slump on Thursday as investors remained wary about the outcome of U.S.-China trade talks and potential for rising interest rates, while a slew of disappointing earnings reports also weighed.
The benchmark S&P 500 fell below its 200-day moving average, a key technical indicator of long-term momentum, for the first time since April 6.
The Dow Jones Industrial Average also fell below its 200-day moving average for the first time since April 2.
A high-level U.S. delegation arrived in Beijing on Thursday for a two-day talk on tariffs. However, a breakthrough was viewed as highly unlikely, especially as the U.S. embassy said the delegation would leave as early as Friday evening.
The Federal Reserve also reaffirmed the outlook for more rate hikes on Wednesday, but not faster than previously planned, expressing confidence that a recent rise in inflation near to its target would be sustained.
Worries about higher rates, tariffs and rising inflation have taken the wind out of what is expected to be the best quarterly earnings in seven years.
“It’s definitely rate hikes and tariffs, and the sense that earnings have peaked,” said Paul Brigandi, head of trading at Direxion Funds in New York.
“There is a lot of negative sentiment out there ... (on fears) that this really is the end of the cycle and we could see a slowdown at the same time rates are rising. It doesn’t look very pretty from a technical standpoint.”
At 11:33 a.m. ET, the Dow Jones Industrial Average was down 352.88 points, or 1.47 percent, at 23,572.10, the S&P 500 was down 35.98 points, or 1.37 percent, at 2,599.69 and the Nasdaq Composite was down 95.80 points, or 1.35 percent, at 7,005.10.
All 11 major S&P sectors were in the red, led by the financial sector’s 2.2 percent drop.
Bank stocks dropped tracking a pullback in U.S. Treasury yields after the ISM non-manufacturing data for April came in below estimates.
Among earnings, AIG dropped 9.3 percent after the insurer reported a lower-than-expected quarterly profit, while Cardinal Health declined 18.7 percent after the drug distributor cut its annual earnings forecast.
Tesla shares fell 8.5 percent after Chief Executive Officer Elon Musk cut off analysts asking about the company’s profit potential, despite promises that production of the troubled Model 3 electric car was on track.
Caterpillar was down 3.7 percent after BofA Merrill Lynch downgraded the stock to “neutral”.
Declining issues outnumbered advancers for a 2.57-to-1 ratio on the NYSE and for a 3.19-to-1 ratio on the Nasdaq.
The S&P index recorded four new 52-week highs and 35 new lows, while the Nasdaq recorded 34 new highs and 55 new lows. (Reporting by Sruthi Shankar in Bengaluru; Editing by Shounak Dasgupta)