*

November nonfarm payrolls above estimates at 227,000

*

Ulta Beauty ( ULTA ) gains after raising annual profit forecast

*

Lululemon Athletica ( LULU ) up following upbeat annual forecast

*

Indexes: Dow down 0.4%, S&P 500 up 0.1%, Nasdaq up 0.6%

(Updates to afternoon)

By Caroline Valetkevitch

NEW YORK, Dec 6 (Reuters) -

The S&P 500 and the Nasdaq rose on Friday following upbeat

forecasts from Lululemon Athletica ( LULU ) and other companies and as

monthly U.S. jobs data reinforced expectations for the Federal

Reserve to cut interest rates this month.

The Dow was down slightly, with a 4.8% drop in

UnitedHealth Group ( UNH ) shares weighing on the index.

The S&P 500 and Nasdaq hit intraday record highs earlier.

The S&P 500 consumer discretionary index was up 1.5%

and hit an all-time high as well, with Lululemon leading the way

up.

Shares of Lululemon Athletica ( LULU ) jumped 17.3%

after the sportswear maker increased its full-year forecasts.

Also in the consumer discretionary space, shares of

cosmetics retailer Ulta Beauty ( ULTA ) advanced 9.8% after the

company raised its annual profit forecast.

U.S. job growth

surged

in November, but an increase in the unemployment rate to

4.2% pointed to an easing labor market.

"It does support the case for the Fed to continue to cut

rates in the December meeting and into the first quarter," said

Bill Northey, senior investment director at U.S. Bank Wealth

Management in Billings, Montana.

The Dow Jones Industrial Average fell 160.09

points, or 0.36%, to 44,605.62, the S&P 500 gained 6.29

points, or 0.10%, to 6,081.40 and the Nasdaq Composite

gained 117.87 points, or 0.60%, to 19,818.60.

Following the data, U.S. rate futures were pricing in

about a 90% chance the Fed will lower interest rates by 25 basis

points at its Dec. 17-18 policy meeting, up from 72% earlier,

according to LSEG calculations.

The Fed has lowered interest rates by 75 basis points

since September, when it launched its easing cycle.

Fed Governor

Michelle Bowman

said inflation risks to the economy remained and that

augured caution with further decisions on rate cuts.

Declining issues outnumbered advancers by a 1.18-to-1

ratio on the NYSE. There were 302 new highs and 90 new lows on

the NYSE.

On the Nasdaq, 2,457 stocks rose and 1,778 fell as

advancing issues outnumbered decliners by a 1.38-to-1 ratio.

(Additional reporting by Shashwat Chauhan and Purvi Agarwal in

Bengaluru; Editing by Pooja Desai and David Gregorio)