* US proposes fresh tariffs on $200 bln worth of China goods
* Boeing (NYSE:BA), Caterpillar lead decliners on Dow
* Chipmakers slide
* Indexes down: Dow 0.8 pct, S&P 0.6 pct, Nasdaq 0.4 pct
(Updates to late afternoon)
By Caroline Valetkevitch
NEW YORK, July 11 (Reuters) - U.S. stocks looked set on Wednesday to snap a four-day winning streak after Washington's threat to impose tariffs on an additional $200 billion worth of Chinese goods fanned trade war fears, while a sharp drop in oil prices hit energy.
China responded to U.S. President Donald Trump's threats by accusing the United States of bullying and warned that it would hit back. names including Boeing BA.N , 3M MMM.N and Caterpillar CAT.N , which have been among the hardest hit throughout the recent trade dispute, were among the Dow's biggest drags on Wednesday.
The materials index .SPLRCM , down 1.7 percent, was another big negative influence among sectors, with Freeport-McMoRan FCX.N down 3.7 percent as copper prices hit their lowest in about a year. tone of today didn't start off well due to tariff fears," said Michael Antonelli, managing director, institutional sales trading, at Robert W. Baird in Milwaukee.
But, he said, "the drop in oil is driving this extra drop lower."
The S&P 500 energy index .SPNY fell 2.1 percent, leading sector declines. U.S. crude oil futures settled down 5 percent on the trade dispute escalation and as expectations of growing supplies increased on news that Libya would reopen ports. Dow Jones Industrial Average .DJI fell 186.39 points, or 0.75 percent, to 24,733.27, the S&P 500 .SPX lost 16.59 points, or 0.59 percent, to 2,777.25 and the Nasdaq Composite .IXIC dropped 32.84 points, or 0.42 percent, to 7,726.35.
The drop is not as steep as what was seen in late March and early April when the escalating trade rhetoric between China and the United States led to the S&P falling more than 2 percent on four occasions.
The market slide has been contained by the speculation that the Trump administration could change its mind by the end of August, when the tariffs are due to come into effect, some strategists said.
Investors are also looking forward to the earnings season, where S&P 500 companies are expected to post second-quarter profit growth of around 21 percent, according to Thomson Reuters data.
However, Morgan Stanley (NYSE:MS) told clients that the earnings season could trigger risk aversion among investors if companies start warning of slower growth due to trade tariffs. which largely depend on China for their revenue, weighed the most, with the Philadelphia semiconductor index .SOX falling 2.4 percent.
The utilities sector .SPLRCU was the only one in positive territory, with a 0.8 percent gain.
Twenty-First Century Fox FOXA.O fell 3.6 percent after the media company raised its offer for Britain's Sky SKYB.L , seeing off rival bidder Comcast CMCSA.O for now. Comcast shares were up 1.2 percent.
Declining issues outnumbered advancing ones on the NYSE by a 2.31-to-1 ratio; on Nasdaq, a 1.61-to-1 ratio favored decliners.
The S&P 500 posted 12 new 52-week highs and 1 new lows; the Nasdaq Composite recorded 59 new highs and 43 new lows.