US STOCKS-Wall Street slips, but holds above early lows on hopes of tariff reprieves

By Chuck Mikolajczak

NEW YORK, March 21 (Reuters) - U.S. stocks dipped on Friday, but were well off their earlier lows after comments from U.S. President Donald Trump provided hope that previously announced tariffs expected to begin in early April may not be as onerous as feared.

Trump said there will be flexibility on tariffs and that his top trade chief plans to speak with his Chinese counterpart next week. The president also reiterated his plan to use duties as a way to narrow the U.S. trade deficit with China.

Markets have been under pressure in recent weeks as changing announcements about the timing and size of tariffs have clouded the outlook for corporate profits as well as the Federal Reserve's monetary policy path.

Stocks have shown some signs of bottoming this week, however, with the S&P rallying more than 1% on Wednesday in the wake of the Fed's latest policy announcement. The central bank kept rates unchanged and signaled two cuts were likely this year.

Even so, Michael Arone, chief investment strategist for the U.S. SPDR Business at State Street Global Advisors in Boston, said it was concerning that investors' attempts to rally the stock market this week had largely failed.

"The reasons are the continued uncertainty around trade policy from the Trump administration, continued concerns about a U.S. economic growth scare and ultimately uncertainty about what the path of monetary policy looks like," Arone said.

Chicago Federal Reserve President Austan Goolsbee said the central bank needs more time to "sort through" how Trump's policies play out in the economy, while New York Fed President John Williams echoed Goolsbee's comments and said there was no rush to change monetary policy right now.

The Dow Jones Industrial Average .DJI fell 82.33 points, or 0.20%, to 41,870.99, the S&P 500 .SPX lost 17.49 points, or 0.31%, to 5,645.40 and the Nasdaq Composite .IXIC lost 15.51 points, or 0.09%, to 17,676.26.

The S&P was down as much as 1.06% earlier in the day.

With earnings season set to begin next month, multiple companies have been reducing their forecasts. FedEx FDX.N slumped 6.5% after the package delivery company cut its full-year profit and revenue forecasts, citing continued weakness and uncertainty in the U.S. industrial economy.

Peer UPS UPS.N lost 2.2%. Delivery firms are often seen as a bellwether for the global economy given their reach into a wide swath of different industries.

The delivery companies weighed on the Dow Jones Transport Index .DJT which was down 0.4% after having fallen as much as 2.7% earlier in the session.

Also weighing on the transports were airlines such as Delta DAL.N and United UAL.N after Britain's Heathrow Airport was shut, sparking global travel turmoil.

Nike NKE.N slid 5.7% as the worst performer among Dow Industrial components after the sports apparel maker projected a sharper decline in fourth-quarter revenue than analysts had anticipated.

Materials .SPLRCM led declines among the 11 S&P 500 sectors as it fell more than 1%, weighed down by a drop of more than 5% in Nucor Corp NUE.N after the company forecast first-quarter profit below estimates.

Boeing BA.N jumped 4.4% after Trump awarded the planemaker a contract to build the U.S. Air Force's most sophisticated fighter jet, beating out rival Lockheed Martin LMT.N, which tumbled 6.1%.

Friday's session also marks the simultaneous expiry of quarterly derivatives contracts tied to stocks, index options and futures, also known as "triple witching", which added to market volatility.

For the week, the S&P is on pace to snap a four-week streak of declines, while the Nasdaq is poised for a fifth straight weekly decline, its longest such streak in nearly three years.

Declining issues outnumbered advancers by a 2.22-to-1 ratio on the New York Stock Exchange and by a 1.64-to-1 ratio on Nasdaq.

The S&P 500 posted nine new 52-week highs and 16 new lows, while the Nasdaq Composite recorded 25 new highs and 171 new lows.