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US health insurers fall after Medicare rates disappoint

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Tesla slides after Q1 deliveries miss

(Updates to 1600 ET)

By Caroline Valetkevitch

NEW YORK, April 2 (Reuters) - U.S. stocks fell on

Tuesday as investors weighed chances that the Federal Reserve

could delay cutting interest rates, while Tesla shares dropped

after the electric car maker posted fewer quarterly deliveries

for the first time in nearly four years.

Tesla was among the big`est drags on the S&P 500 and Nasdaq.

Adding to caution, U.S. Treasury 10-year yields rose to

their highest since late November.

Recent solid U.S. economic reports have raised doubts about

whether the Fed could deliver the three rate cuts outlined in

its latest forecast.

"The narrative of 'higher for longer' is coming back into

play despite the fact that the Fed does see a rate cut sometime

this year. So this has got the market worried," said Quincy

Krosby, chief global strategist at LPL Financial in Charlotte,

North Carolina.

According to preliminary data, the S&P 500 lost 37.73

points, or 0.72%, to end at 5,206.04 points, while the Nasdaq

Composite lost 156.38 points, or 0.95%, to 16,240.45.

The Dow Jones Industrial Average fell 387.81 points, or

1.00%, to 39,171.55.

Data on Tuesday showed new orders for U.S.-manufactured

goods rebounded more than expected in February, while U.S. job

openings held steady at higher levels.

The market has pared back expectations for rate cuts to

about two this year, from three a few weeks ago, according to

LSEG's rate probability app.

Fed officials who spoke on Tuesday reiterated that the

U.S. central bank is in no rush to cut rates.

San Francisco Fed President Mary Daly cited a "real

risk" of cutting rates too soon and locking in too-high

inflation.

Also, Fed Bank of Cleveland President Loretta

Mester

said on Tuesday she continues to expect the central bank

will be able to cut rates this year and noted the June policy

meeting might be when the easing kicks off if economic data

allows it.

Investors are eagerly awaiting Friday's U.S. non-farm

payrolls data.

Healthcare shares were among the day's weakest performers.

UnitedHealth ( UNH ), CVS Health ( CVS ) and Humana fell

as the U.S. government kept reimbursement rates for providers of

Medicare Advantage health plans unchanged, in a setback for

insurers.

The CBOE Volatility index, Wall Street's fear gauge,

rose.

Among other decliners, Calvin Klein-parent PVH Corp's shares

tumbled after the retailer forecast a roughly 11% drop

in first-quarter revenue.