US STOCKS-Wall St hit again by growth worries; blue-chip earnings prop up Dow


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* White House adviser warns of growth hit from govt shutdown

* CEOs at Davos worried of trade war on global growth

* Blue-chips IBM, P&G, United Tech post strong results

* Only defensive sectors gain; VIX hits a 2-week high

* Dow up 0.26 pct, S&P off 0.19 pct, Nasdaq down 0.39 pct (Updates to early afternoon, adds comments, background)

By Shreyashi Sanyal

Jan 23 (Reuters) - The S&P 500 and the Nasdaq dropped onWednesday as U.S. stocks gave up a strong start, hamstrung bylingering concerns over economic growth, while the Dow stayedafloat helped by strong earnings from IBM and other blue-chips.

The United States could end up with no growth this quarterif the partial government shutdown that began on Dec. 22extended through March, White House economic adviser KevinHassett said, though he did not see the risk of a creditdowngrade. urn:newsml:reuters.com:*:nL1N1ZN0NG

That added to nerves, with investors already fretting afterthe International Monetary Fund on Monday trimmed its 2019global growth estimates and China reported its slowest economicgrowth in 28 years, partly due to the Sino-U.S. trade war.

Companies gathered at the World Economic Forum in Davos,Switzerland, said they are worried the trade war will dampen theglobal economy and business investments even further. urn:newsml:reuters.com:*:nL1N1ZM03S

As much as Trump wants to boost markets through a pact, hewill not soften his position that China must make realstructural reforms, including how it handles intellectualproperty, to reach a deal, advisers say. urn:newsml:reuters.com:*:nL1N1ZN02Q

"It's a microcosm of 2018 that you're having all over againwhere you have good data - IBM and few other companies postingstrong earnings - but the headlines are still somewhatnegative," said Phil Blancato, Chief Executive Officer ofLadenburg Thalmann Asset Management in New York.

"Whether it is the recent post coming out of Washingtonsaying that we have a modest to flat GDP growth or noise out ofDavos where many CEOs are uncertain of the current investmentenvironment, stronger good data contrasts with headlines."

The trade-sensitive chipmakers .SOX fell 0.9 percent,while Boeing CoBA.N dropped 0.4 percent, offsetting theimpact of a surge in International Business Machines CorpIBM.N on the tech index .SPLRCT and the Dow, respectively.

IBM jumped 7.7 percent after its 2019 profit beat analysts'expectations. urn:newsml:reuters.com:*:nL3N1ZM56C

So far this earning season, 76 S&P 500 companies havereported fourth-quarter results. Of them, 77.6 percent have beatprofit estimates, above the historical average of 64 percent,according to Refinitiv data.

But the earnings growth estimates for last quarter havedropped to 14.2 percent from 20.1 percent at the start ofOctober, while 2019 profit growth estimates have come down to5.9 percent from 10.2 percent in the same period.

At 12:59 p.m. ET, the S&P 500 .SPX was down 5.03 points,or 0.19 percent, at 2,627.87 and the Nasdaq Composite .IXIC was down 27.63 points, or 0.39 percent, at 6,992.72.

The Dow Jones Industrial Average .DJI was up 64.17 points,or 0.26 percent, at 24,468.65. It got a boost from IBM as wellas United Technologies CorpUTX.N and Procter & Gamble CoPG.N , both of which gained more than 4 percent on strongresults. urn:newsml:reuters.com:*:nL3N1ZN3YAurn:newsml:reuters.com:*:nL3N1ZN3T0

The CBOE Volatility index .VIX , also known as WallStreet's fear gauge, rose to its highest level in two weeks.

"If the VIX stabilizes at these levels then it just meansthat a down wave is coming. Markets aren't really bullish, theyare uncertain," said Larry Benedict, CEO at Opportunistic Traderin Boca Raton, Florida.

Only the defensive utilities .SPLRCU and consumer staples .SPLRCS indexes rose among the 11 major S&P sectors.

The FAANG stocks, Facebook IncFB.O , Apple IncAAPL.O ,Amazon.com IncAMZN.O , Netflix IncNFLX.O and Google-parentAlphabet IncGOOGL.O fell between 0.3 percent and 2.2 percent.

Declining issues outnumbered advancers for a 1.38-to-1 ratioon the NYSE and a 1.27-to-1 ratio on the Nasdaq.

The S&P index recorded four new 52-week highs and one newlow, while the Nasdaq recorded 16 new highs and 34 new lows. (Reporting by Shreyashi Sanyal and additional reporting bySruthi Shankar in Bengaluru; Editing by Arun Koyyur) ((Shreyashi.Sanyal@thomsonreuters.com; +1 646 223 8780 ;Reuters Messaging:Shreyashi.Sanyal.thomsonreuters.com@reuters.net))




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