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US health insurers fall after Medicare rates disappoint

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Tesla slides after Q1 deliveries miss

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Indexes: Dow down 1.1%, S&P 500 down 0.9%, Nasdaq down

1.2%

(Updates to 1430 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's stock fell more than 5% and was among the

biggest drags on the S&P 500 and Nasdaq.

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

their highest since late November.

"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.

Recent solid U.S. economic reports have raised doubts

about whether the Fed could deliver the three rate cuts outlined

in its latest forecast.

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 Dow Jones Industrial Average fell 437.15

points, or 1.1%, to 39,129.7. The S&P 500 lost 46.03

points, or 0.88%, at 5,197.74 and the Nasdaq Composite

dropped 190.95 points, or 1.16%, to 16,205.89.

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,

touched an over two-week high.

Traders are pricing in a near 57% chance of the Fed cutting

interest rates by at least 25 basis points in June, down from

64% just a week ago, as per CMEGroup's FedWatch tool.

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

payrolls data. Also, several Fed officials are due to speak this

week.

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

tumbled after the retailer forecast a roughly 11% drop

in first-quarter revenue.

Declining issues outnumbered advancers on the NYSE by a

3.50-to-1 ratio; on Nasdaq, a 3.08-to-1 ratio favored decliners.

The S&P 500 posted 22 new 52-week highs and four new

lows; the Nasdaq Composite recorded 43 new highs and 113 new

lows.