*

Indexes post steep weekly percentage losses

*

Consumer sentiment sours, inflation expectations rise

*

UnitedHealth ( UNH ) drops after report of DOJ investigation

(Updates to market close)

By Stephen Culp

NEW YORK, Feb 21 (Reuters) - U.S. stocks tumbled on

Friday, extending their selloff in the wake of dour economic

reports and closing the book on a holiday-shortened week fraught

with new tariff threats and worries of softening consumer

demand.

All three major U.S. stock indexes moved decisively lower on

the heels of the data, and continued their slide into afternoon

trading. All three also posted steep weekly losses.

"I don't like all this red on a Friday," said Greg Bassuk,

CEO at AXS Investments in New York. "We're seeing consumer

sentiment, tariffs and corporate earnings having leap-frogged AI

and technology as the primary drivers of market direction."

Economic data showed U.S. business activity decelerating and

consumer sentiment deteriorating, with survey participants

expressing an increasingly gloomy outlook in the face of

economic unknowns.

The data comes on the heels of Walmart's ( WMT )

disappointing guidance on Thursday, which sparked fears of

dampening consumer demand.

U.S. businesses' optimism has "evaporated," according to PMI

commentary provided by S&P Global's chief economist Chris

Williamson, amid "a darkening picture of heightened

uncertainty."

"Uncertainty is the new investor narrative," Bassuk added.

"It's sparking the volatility that we've seen this week."

"We're anticipating that the uncertainty and the

volatility is going to remain at least through the end of this

first quarter."

Economically sensitive sectors, such as Dow Transports

, chips, smallcaps, housing, and

consumer discretionary slid more than 2%.

The CBOE volatility index touched its highest level

since February 4.

This week, U.S. President Donald Trump said he will soon

announce new tariffs covering lumber and forest products, in

addition to previously announced plans to impose duties on

imported cars, semiconductors and pharmaceuticals.

According to preliminary data, the S&P 500

lost 104.01 points, or 1.70%, to end at 6,013.46 points,

while the Nasdaq Composite lost 434.97 points, or 2.20%,

to 19,524.01. The Dow Jones Industrial Average

fell 751.33 points, or 1.69%, to 43,428.02.

Fourth-quarter earnings season is in its final stretch. Some

425 of the companies in the S&P 500 have reported, with 76% of

them beating Wall Street expectations, according to LSEG.

Analysts now see aggregate fourth-quarter S&P 500 earnings

growth of 15.7% year-on-year, a significant improvement over the

7.8% annual growth prediction as on Jan. 1, per LSEG.

Shares of UnitedHealth ( UNH ) tumbled following a Wall

Street Journal report that the Department of Justice has

launched an investigation into the health insurer's Medicare

billing practices.

Block slid after the payment firm's fourth-quarter

profit fell short of estimates.

Akamai Technologies ( AKAM ) dropped as the cybersecurity

company forecast annual 2025 revenue below estimates.

Electric vehicle makers Tesla, Rivian both

lost ground after they both announced recalls.