U.S. Markets close in 3 hrs 52 mins

US STOCKS-S&P500 index falls 2.0 percent as U.S. bond yields soar and investors shun risk

(For a live blog on the U.S. stock market, click or type LIVE/ in an Eikon news window.)

* Indexes fall: Dow 2.05 pct, S&P 2.15 pct, Nasdaq 2.73 pct

* Treasury yields at 7-yr highs, global growth woes weigh (Updates to late afternoon, adds commentary, New York dateline, changes byline)

By Sinéad Carew

Oct 10 (Reuters) - Wall Street stock indexes tumbled on Wednesday, on track for the biggest daily decline since April, and the sell-off intensified as the day wore on as rising U.S. Treasury yields and trade policy related worries sent investors fleeing for safety.

The advance of U.S. Treasury yields to more than 7-year highs has hurt equity investor confidence. Hurricane Michael's landfall in Florida on Wednesday added to worries about energy companies.

The S&P 500 and the Dow Jones Industrial Average was down more than 2.0 on Wednesday afternoon and, at the day's low, the S&P500 index had retreated 4.3 percent from its intraday record.

All three indexes hit records between Aug. 30 and Oct. 3, despite the escalating U.S.-China trade policy dispute, which has been creating uncertainty about corporate earnings prospects.

Mona Mahajan, U.S. Investment Strategist, Allianz Global Investors, New York said the market could potentially sell off as much as 10 percent before advancing again.

"The market is digesting the potential that rates moving upwards eventually seep into the real economy in the form of mortgage rates, auto rates, student lending rates," Mahajan said. "What we're seeing here is the market positioning for potential lower growth."

But Mahajan said that equity markets in the six months following midterm U.S. elections tend to perform well so assuming economic growth stays intact, "this could be an interesting buying opportunity."

At 3:04PM ET, the Dow Jones Industrial Average fell 543.1 points, or 2.05 percent, to 25,887.47, the S&P 500 lost 61.96 points, or 2.15 percent, to 2,818.38 and the Nasdaq Composite dropped 210.97 points, or 2.73 percent, to 7,527.05.

The retreat on Wall Street was led by technology stocks , which dropped 3.0 percent.

The energy sector wasn't far behind with a 2.9 percent drop as U.S. oil production was decimated as the industry braced the for Hurricane Michael.

The CBOE Volatility Index, Wall Street's "fear gauge," rose 4.4 points, to go above 20 for the first time since early April.

The only S&P500 index gainers in the sea of red was the defensive utilities sector, which clung to a 0.16 percent gain.

Declining issues outnumbered advancing ones on the NYSE by a 5.11-to-1 ratio; on Nasdaq, a 3.43-to-1 ratio favored decliners. (Reporting by Shreyashi Sanyal in Bengaluru; Editing by Anil D'Silva and Clive McKeef)