*

Ford and General Motors ( GM ) fall

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Target ( TGT ) drops on bleak FY forecast

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Walgreens jump amid take-private deal

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Indexes mixed: Dow -0.70%, S&P 500 -0.33%, Nasdaq +0.48%

By Chibuike Oguh, Johann M Cherian and Sukriti Gupta

NEW YORK, March 4 (Reuters) - Wall Street's main indexes

fell on Tuesday, with the tech-heavy Nasdaq on track to confirm

a correction, as trade tensions escalated following U.S.

President Donald Trump's new tariffs on Canada, Mexico and

China.

The 25% tariffs on imports from Mexico and Canada, along

with doubled duties on Chinese goods, took effect on Tuesday.

China

and

Canada

retaliated while Mexican President Claudia Sheinbaum

vowed

to respond likewise, without giving details.

The Nasdaq Composite was on track to veer into correction

territory, with the index set to fall 10% from its record

closing high on December 16.

"Equity valuations have been very elevated and there's been

yellow flags all over the horizon given moves to cut government

spending," said Ben McMillan, chief investment officer at IDX

Insights in Tampa, Florida. "Now on top of that, we have all

this rhetoric around tariffs."

Shares in financials and industrials were

the biggest losers among the benchmark S&P 500's 11 main

sectors.

Citigroup ( C/PN ) and JPMorgan Chase & Co ( JPM ) fell 5.4%

and 3.1%, respectively, sending the bigger banks index

down 3.6%.

The CBOE market volatility index rose 0.70% to its

highest since December 20.

"The fear here is that it's going to slow (economic)

growth," said Adam Sarhan, chief executive of 50 Park

Investments in New York.

"And when you have a slowdown in economic conditions, it's a

situation where banks specifically make less money because fewer

goods and services are traveling through the economy."

At 2:07 p.m. ET, the Dow Jones Industrial Average

fell 304.66 points, or 0.70%, to 42,886.58. The S&P 500

lost 19.02 points, or 0.33%, at 5,830.70 and the Nasdaq

Composite rose 87.51 points, or 0.48%, to 18,437.70.

Car makers Ford and General Motors ( GM ), which have

vast supply chains across North America, fell 1.7% and 2.8%,

respectively. The domestically focused Russell 2000 index

fell 0.3%.

Wall Street is really concerned, McMillan said. "The

likelihood of tariffs will lead to higher prices and therefore

lower spending."

Target ( TGT ) fell 2.8% after the retailer forecast

full-year comparable sales below estimates.

Best Buy ( BBY ) fell 12% after the electronics retailer

issued a downbeat forecast, while Walgreens jumped 7.2%

as a report hinted that the pharmacy chain is closing in on a

take-private deal by Sycamore Partners.

Declining issues outnumbered advancers by a 2.51-to-1 ratio

on the NYSE. There were 70 new highs and 433 new lows on the

NYSE.

The S&P 500 posted 40 new 52-week highs and 43 new lows

while the Nasdaq Composite recorded 27 new highs and 582 new

lows.