Updates to mid-afternoon

By Stephen Culp

NEW YORK, Feb 21 (Reuters) - Wall Street tumbled on Friday, extending its selloff in the wake of dour economic reports, closing the door on a holiday-shortened weak fraught with new tariff threats and worries of softening consumer demand.

All three major U.S. stock indexes moved decisively lower on the heels of the data, and continued their slide into afternoon trading.

The indexes are on track to post weekly losses, with the S&P 500 and the Nasdaq setting course for their biggest weekly drop since early January, and the Dow on the road to its largest Friday-to-Friday plunge since mid-October.

Economic data showed U.S. business activity decelerating and consumer sentiment deteriorating, with survey participants expressing an increasingly gloomy outlook in the face of economic unknowns.

U.S. businesses' optimism has "evaporated," according to PMI commentary provided by S&P Global's chief economist Chris Williamson, amid "a darkening picture of heightened uncertainty."

"The Michigan survey data, showed a significant retreat (in sentiment)," said Michael Green, chief strategist at Simplify Asset Management in Philadelphia. "The key story here continues to be a tremendous amount of uncertainty ... it feels like we could walk in tomorrow and markets could be down 20%"

Economically sensitive sectors, such as Dow Transports .DJI, chips .SOX, smallcaps .RUT, housing .HGX, and consumer discretionary .SPLRCD slid more than 2%.

Megacap momentum stocks .NYFANG were off 2.6%, and among the "magnificent 7" group all but Apple AAPL.O were down more than 1%, with Alphabet GOOGL.O, Nvidia NVDA.O Amazon AMZN.O and Tesla TSLA.O down between 2.4% and 5.0%.

The CBOE volatility index .VIX touched its highest level since February 4.

This week, U.S. President Donald Trump said he will soon announce new tariffs covering lumber and forest products, in addition to previously announced plans to impose duties on imported cars, semiconductors and pharmaceuticals.

The Dow Jones Industrial Average .DJI fell 744.20 points, or 1.68%, to 43,432.45, the S&P 500 .SPX lost 92.98 points, or 1.53%, to 6,024.54 and the Nasdaq Composite .IXIC lost 381.12 points, or 1.91%, to 19,581.24.

Among the 11 major sectors of the S&P 500, all but consumer staples .SPLRCS were lower, with consumer discretionary and industrials .SPLRCI suffering the steepest percentage losses.

Fourth-quarter earnings season is on the final stretch, with 425 of the companies in the S&P 500 having reported. Of those, 76% have beaten Wall Street expectations, according to LSEG.

Analysts now see aggregate fourth-quarter S&P 500 earnings growth of 15.7% year-on-year, a significant improvement over the 7.8% annual growth prediction as on Jan. 1, per LSEG.

Shares of UnitedHealth UNH.N tumbled 6.9% following a Wall Street Journal report that the Department of Justice has launched an investigation into the health insurer's Medicare billing practices.

Block XYZ.N tumbled 17.9% after the payment firm's fourth-quarter profit fell short of estimates.

Akamai Technologies AKAM.O dropped 20.6% as the cybersecurity company forecast annual 2025 revenue below estimates.

Electric vehicle makers Tesla TSLA.O, Rivian RIVN.O were off 4.9% and 4.0%, respectively, after they both announced recalls.

Declining issues outnumbered advancers by a 2.44-to-1 ratio on the NYSE. There were 86 new highs and 94 new lows on the NYSE.

On the Nasdaq, 1,117 stocks rose and 3,216 fell as declining issues outnumbered advancers by a 2.88-to-1 ratio.

The S&P 500 posted 18 new 52-week highs and 7 new lows while the Nasdaq Composite recorded 65 new highs and 113 new lows.

(Reporting by Stephen Culp; Additional Reporting by Shashwat Chauhan and Sukriti Gupta in Bengaluru; Editing by David Gregorio)

((stephen.culp@thomsonreuters.com; 646-223-6076;))