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* U.S. still pushing to limit capital flows to China - BBG
* China tones down expectations ahead of trade talks - SCMP
* Washington expands blacklist on Chinese firms
* Boeing falls on fresh worries over 737 MAX
* Indexes down: Dow 1.07%, S&P 500 1.21%, Nasdaq 1.18% (Updates prices, adds comments)
By Shreyashi Sanyal
Oct 8 (Reuters) - U.S. stocks tumbled on Tuesday as optimism faded over the outcome of trade talks after a report the Trump administration was moving ahead with efforts to limit capital flows to China and the inclusion of Chinese firms to a blacklist.
The declines were broad-based, with the 11 major S&P 500 sectors trading lower and all the 30 components of the blue-chip Dow Jones index in negative territory.
Adding to the pessimism was a South China Morning Post report that said China had toned down expectations ahead of the high-level talks set to begin on Thursday, and that the Chinese delegation could depart Washington a day earlier than planned.
"The headlines are painting a picture of a less optimistic tone to the trade talks this week," said John Zaller, chief investment officer of MAI Capital Management in Cleveland, Ohio.
"Investors are not expecting a big deal or a small deal this week, but anything less than a tariff delay would be a pretty big disappointment for the markets."
The U.S. widened its trade blacklist to include Chinese video surveillance firm Hikvision and surveillance equipment maker Zhejiang Dahua Technology among others, drawing a sharp rebuke from Beijing.
This pressured U.S. suppliers. Intel Corp, Nvidia Corp, Western Digital and Seagate Technology fell between 1.7% and 4%, while Ambarella Inc slumped 9%.
The Philadelphia Semiconductor index declined 2.6%, while technology stocks dropped 1.2%.
Weighing on the Dow Jones Industrial Average was a 1.6% fall in shares of Boeing Co.
The Wall Street Journal reported friction between the United States and Europe could further delay efforts to resume flights of the planemaker's best-selling 737 MAX jets, which have been grounded since early 2019. Boeing said it delivered half the number of planes in the first nine months of 2019 than it did in the same period a year earlier.
At 11:27 a.m. ET, the Dow Jones Industrial Average was down 283.29 points, or 1.07%, at 26,194.73, while the S&P 500 was down 35.46 points, or 1.21%, at 2,903.33. The Nasdaq Composite was down 94.03 points, or 1.18%, at 7,862.27. The S&P 500 and Dow indexes fell below their 100-day moving average.
Despite the steep declines, the indexes were trading above last week's lows, when a contraction in U.S. manufacturing and a dismal reading on business activity sparked fears of a looming recession in the world's biggest economy.
While moderate jobs growth in September lifted sentiment on Friday, traders still see an 84% chance of the Federal Reserve cutting interest rates by a quarter percentage point in October, according to CME Group's FedWatch tool.
Those bets were bolstered on Tuesday by data that showed U.S. producer prices unexpectedly fell in September.
Market participants will now focus on third-quarter earnings season beginning next week and analysts expect the worst quarterly profit performance since 2016, with earnings from S&P 500 companies declining nearly 3% from a year earlier, based on IBES data from Refinitiv.
U.S.-listed Chinese stocks declined, with Alibaba Group Holding, JD.com Inc and Baidu Inc falling between 1.5% and 3%.
Declining issues outnumbered advancers for a 3.59-to-1 ratio on the NYSE and for a 3.63-to-1 ratio on the Nasdaq.
The S&P index recorded two new 52-week highs and 15 new lows, while the Nasdaq recorded eight new highs and 101 new lows. (Reporting by Shreyashi Sanyal and Arjun Panchadar in Bengaluru; Editing by Sriraj Kalluvila)