By Yashaswini Swamynathan and Abhiram Nandakumar
REUTERS - Wall Street was lower on Tuesday, led by a slide in financial stocks, as the outlook for interest rates remained cloudy and oil hovered near one-month lows.
Crude was under pressure after data showed U.S. gasoline demand unexpectedly fell in January and skepticism rose about a possible deal to cut global oversupply.
Gold, a traditional safe-haven, rose more than 1 percent.
International Monetary Fund Managing Director Christine Lagarde warning on Tuesday of increasing risks to global economic growth, unless there were stronger measures by policymakers, added to the downbeat sentiment.
Lagarde's comments come a week after Fed Chair Janet Yellen urged caution on raising rates, citing a shaky global economy and low oil prices.
However, support for an aggressive position on rates from some Fed policymakers sparked concerns about the timing and the number of rate hikes for the year.
Traders have priced in only one hike in 2016, with an even chance of the central bank raising rates in June, according to the CME Group's FedWatch program.
"We're feeling some of the same macro factors to a lesser degree, but there's a knockdown effect that if Europe is slowing down, that doesn't necessarily bode well for us," said Steven Baffico, chief executive at Four Wood Capital in New York.
Data on Tuesday showed that the U.S. trade deficit widened to $47.1 billion in February, more than the $46.2 billion estimated.
The Institute for Supply Management's index of non-manufacturing activity likely rose to 54 in March, from 53.4 in February, a report at 10 a.m. ET (1400 GMT) is expected to show.
At 9:35 a.m. ET the Dow Jones industrial average was down 91.63 points, or 0.52 percent, at 17,645.37, the S&P 500 was down 14.48 points, or 0.70 percent, at 2,051.65 and the Nasdaq Composite was down 34.76 points, or 0.71 percent, at 4,857.04.
All 10 major S&P sectors were lower, led by the 1.2 percent fall in the financials sector. Wells Fargo fell 1.5 percent.
Allergan shares fell 18 percent to $227.72 as the U.S. Treasury unveiled rules to curb tax inversion deals, potentially derailing the drugmaker's merger with Pfizer. Pfizer was up 1 percent at $31.
Disney slipped 2 percent to $96.67 after the media company said a veteran executive, who was tipped to be its next CEO, would step down. The stock was the biggest drag on the Dow.
Twitter was up 2.5 percent at $17.50 after The National Football League said it had chosen the social media company to stream its Thursday night games during the 2016 regular season.
Declining issues outnumbered advancing ones on the NYSE by 2,230 to 424. On the Nasdaq, 1,730 issues fell and 468 advanced.
The S&P 500 index showed five new 52-week highs and one new low, while the Nasdaq recorded eight new highs and nine lows.
(Reporting by Yashaswini Swamynathan and Abhiram Nandakumar in Bengaluru; Editing by Anil D'Silva)
