(For a Reuters live blog on U.S., UK and European stock

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ADP survey: US adds 143,000 private jobs in September

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Tesla drops on downbeat Q3 vehicle deliveries

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Nike ( NKE ) falls after withdrawing annual revenue forecast

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Humana tanks on fewer members in Medicare Advantage plans

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Indexes: Dow up 0.07%, S&P 500 down 0.24%, Nasdaq off

0.49%

(Updated at 09:54 a.m. ET/1354 GMT)

By Johann M Cherian and Purvi Agarwal

Oct 2 (Reuters) -

The benchmark S&P 500 and the Nasdaq traded near two-week

lows on Wednesday as investors priced in a possible escalation

in geopolitical tensions in the Middle East, while a survey

allayed worries about a rapid cooldown in the U.S. labor market.

Markets were wary as Israel and the U.S. vowed to strike

back after Iran attacked Israel on Tuesday, following which the

S&P 500 and the Nasdaq logged their biggest one-day drops in

nearly a month.

The Dow Jones Industrial Average gained 28.72

points, or 0.07%, to 42,175.03, the S&P 500 lost 13.30

points, or 0.24%, to 5,694.09 and the Nasdaq Composite

lost 88 points, or 0.49%, to 17,825.69.

Eight of the 11 S&P 500 sectors were lower, while Energy

stocks hit a more than one-month high and were up 1.5%.

Oil prices climbed more than 3% as traders priced in

possible supply disruptions from the oil-rich Middle East.

Chevron ( CVX ) and Exxon Mobil ( XOM ) added more than 1% each.

Defense stocks such as Lockheed Martin ( LMT ) and RTX

were flat after the broader S&P 500 aerospace and

defense index hit a record high on Tuesday.

"Sentiment is dominated by the risk of escalating

conflict in the Middle East and there is a lack of information

on how strong the Israeli response is going to be. That's why

the market is sort of not doing a lot," said Jay Hatfield,

portfolio manager at InfraCap.

The CBOE Volatility Index, Wall Street's fear

gauge, hovered near a three-week high and was last at 19.56.

Meanwhile, U.S. private payrolls increased more than

expected in September in

further evidence

that labor market conditions were not deteriorating.

Odds of a quarter-percentage-point rate reduction at the

Fed's November meeting are at 65.7%, up from 42.6% a week ago,

according to the CME Group's FedWatch Tool.

"The ADP report was strong and that might be mitigating

the volatility, because we're not in a complete information

vacuum," Hatfield said.

Comments from Fed policymakers including Beth Hammack

and Alberto Musalem are scheduled through the day, while the

focus will stay on Friday's non-farm payrolls data for

September.

Markets ended September higher after the U.S. Federal

Reserve kicked off its monetary-policy-easing cycle with an

unusual 50-basis-point rate cut to shore up the jobs market.

A dockworkers' strike on the East and Gulf coasts, costing

the economy roughly $5 billion per day according to JPMorgan

analyst estimates, entered its second day.

Some companies such as Walmart ( WMT ), Merit Medical

Systems ( MMSI ) and McCormick ( MKC ) said they had planned for

the strike.

Tesla lost 4.7% after reporting

third-quarter vehicle deliveries

below estimates.

Dow-component Nike ( NKE ) slid 7.4% after withdrawing its

annual revenue forecast just as a new CEO is set to take charge.

Both stocks weighed heavily on the Consumer Discretionary

sector, which was at the bottom with a 1.2% loss.

Humana tanked 21% after it said it expects the

total number of members enrolled in its top-rated Medicare

Advantage plans for those aged 65 and above to decrease for

2025.