May 31, 2018 / 7:52 PM / in 7 months

US STOCKS-Wall St slips as U.S. tariffs spark trade war worries

* Industrials, foods lag as Mexico hits back on U.S. tariffs

* Dollar Tree, Dollar General slump after results

* GM surges after SoftBank invests in self-driving unit

* Dow off 0.9 pct, S&P down 0.6 pct, Nasdaq down 0.2 pct (Updates to late afternoon, changes byline, adds NEW YORK to dateline)

By April Joyner

NEW YORK, May 31 (Reuters) - U.S. stocks fell on Thursday after the United States moved to impose tariffs on metal imports from Canada, Mexico and the European Union, prompting retaliatory measures from some of its trading partners.

U.S. Commerce Secretary Wilbur Ross said a 25 percent tariff on steel imports and a 10 percent levy on aluminum imports from its allies would go into effect on Friday.

Mexico responded by imposing measures on U.S. farm and industrial products, targeting pork legs, apples, grapes and cheeses, as well as steel.

Canada said it would impose retaliatory tariffs on $12.8 billion worth of U.S. exports and challenge the steel and aluminum tariffs under the North American Free Trade Agreement and the World Trade Organization.

The S&P 500 Packaged Foods and Meats index dipped 1.8 percent, with all its 11 components in the red. Kraft Heinz Co and Mondelez International Inc were the biggest drags on the index.

Friction between the United States and its trading partners has roiled financial markets since March, when U.S. President Donald Trump decided to impose the metal tariffs. Trade issues overshadowed economic data showing accelerated growth in U.S. consumer spending.

"The tariffs threw cold water over what might have been an OK day," said Aaron Clark, portfolio manager at GW&K Investment Management in Boston. "As negotiation is done publicly, the news will whip around the market a bit, but in the end, it will probably work out."

The Dow Jones Industrial Average fell 232.88 points, or 0.94 percent, to 24,434.9, the S&P 500 lost 16.19 points, or 0.59 percent, to 2,707.82 and the Nasdaq Composite dropped 14.55 points, or 0.19 percent, to 7,447.91.

The S&P Composite 1500 Steel index gave up earlier gains after Mexico's retaliation, though several of its constituents, including Nucor Corp and United States Steel Corp, were still in positive territory. The steel index was last down 0.1 percent.

Shares of industrial giants Boeing Co and Caterpillar Inc slipped 1.5 percent and 2.1 percent, respectively.

Adding to the trade worries was a report that the United States aimed to target German carmakers, having launched a probe last week into car and truck imports.

The day's biggest percentage gainer among the S&P 500's major sectors was the technology index, which rose 0.1 percent, helped by a 2.7 percent gain in shares of Alphabet Inc and a 1.9 percent rise in Facebook.

General Motors Co shares led the S&P 500 in percentage gains, rising 12.6 percent after Japan's SoftBank Group Corp said it would invest $2.25 billion in GM's autonomous vehicle unit.

Dollar General Corp shares declined 9.5 percent and Dollar Tree Inc shares dropped 14.8 percent after both discount retailers missed Wall Street estimates for their quarterly same-store sales.

Declining issues outnumbered advancing ones on the NYSE by a 1.88-to-1 ratio; on Nasdaq, a 1.42-to-1 ratio favored decliners.

The S&P 500 posted 19 new 52-week highs and 10 new lows; the Nasdaq Composite recorded 138 new highs and 45 new lows. (Additional reporting by Medha Singh in Bangalore; Editing by Arun Koyyur and Rosalba O'Brien)

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