US STOCKS-Wall Street tumbles as yuan slide intensifies trade worries

* Apple set to drop for third session on tariff worries
* Trade-sensitive Boeing, Caterpillar and chip stocks slide
* Tyson Foods rises after profit beats estimates
* Volatility index at near 3-month high
* Indexes drop: Dow 1.91%, S&P 2.02%, Nasdaq 2.67%

(Updates to open)
By Medha Singh
Aug 5 (Reuters) - Wall Street's main indexes fell sharply on
Monday, led by technology companies, as China's willingness to
let the yuan slide in response to the latest U.S. tariff threat
fanned fears that it could further aggravate an ongoing trade
war.
China let the yuan breach the key 7-per-dollar level for the
first time in more than a decade on Monday, and President Donald
Trump slammed it as "a major violation". Trump stunned financial markets last week by threatening to
impose 10% tariffs on the remaining $300 billion of Chinese
imports, abruptly abandoning a brief ceasefire.
"Trade continues to trend in the wrong direction. As in
retaliation for new tariffs, China let the yuan move to a
10-year low versus the U.S. dollar," said Ryan Detrick, senior
market strategist for LPL Financial in Charlotte, North
Carolina.
"Any hopes of a quick resolution with China are fading
quickly."
On Friday, the benchmark S&P 500 .SPX and the Nasdaq
.IXIC suffered their worst weekly performance of 2019, in a
week that also saw the U.S. Federal Reserve's cut interest rates
for the first time in a decade.
At 9:50 a.m. ET, the Dow Jones Industrial Average .DJI was
down 505.65 points, or 1.91%, at 25,979.36, the S&P 500 .SPX
was down 59.19 points, or 2.02%, at 2,872.86.
The Nasdaq Composite .IXIC was down 213.46 points, or
2.67%, at 7,790.61.
All of the 11 major S&P sector were in the red. The S&P
technology sector .SPLRCT , heavily exposed by its chipmakers
and other global technology players to Chinese markets, dropped
3.2%.
Apple Inc AAPL.O slid 4.1% as analysts expected the newly
proposed tariffs to hurt demand for its flagship iPhone, while
the Philadelphia chip index .SOX slipped 3.5%.
Industrial bellwethers Boeing Co BA.N and Caterpillar Inc
CAT.N shed more than 2%.
Signals from the bond market were also daunting as the
inversion of the yield curve between the three-month Treasury
bill US3MT=RR and 10-year bonds US10YT=RR grew to the widest
since April 2007. US/
Interest-rate sensitive banks .SPXBK dropped 3%.
The CBOE Volatility index .VIX , a gauge of investor
anxiety, rose to its highest level in about three months at
21.71 points.
The rest of the high-flying FAANG group also lost ground.
Facebook Inc FB.O , Amazon.com Inc AMZN.O , Netflix Inc
NFLX.O and Google-parent Alphabet Inc GOOGL.O were down
between 2.3% and 2.7%.
More than three quarters of S&P 500 companies have reported
results so far, with about 74% topping analysts' expectations
for profit, according to Refinitiv IBES data.
No.1 U.S. meat processor Tyson Foods Inc TSN.N rose 4.7%
after beating quarterly profit estimates. Declining issues outnumbered advancers for a 7.11-to-1 ratio
on the NYSE and for a 7.20-to-1 ratio on the Nasdaq.
The S&P index recorded two new 52-week highs and 19 new
lows, while the Nasdaq recorded six new highs and 153 new lows.