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Indexes down: Dow 0.03%, S&P 500 0.13%, Nasdaq 0.26%

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Firefly Aerospace ( FLY ) slides after rocket test mishap

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Wolfspeed ( WOLF ) stock soars following bankruptcy exit

(Updates after markets open)

By Niket Nishant and Sukriti Gupta

Sept 30 (Reuters) -

The S&P 500 and the Nasdaq edged lower on Tuesday, the final

day of the third quarter, on worries that a looming U.S.

government shutdown could jeopardize the timely release of

economic data.

Sentiment turned risk averse a day after equities posted

gains, underscoring how sensitive investors still are to any

sign of uncertainty.

While previous shutdowns have had a limited impact on

markets, some analysts warned the current episode could be more

disruptive given the economic backdrop is delicate.

"I don't think it will be disruptive for the market in the

long term. However, it does inject more uncertainty in monetary

policy and fiscal policy," said Eric Teal, chief investment

officer at Comerica Wealth Management.

At 10:08 a.m. ET, the Dow Jones Industrial Average

fell 15.05 points, or 0.03%, to 46,301.02, the S&P 500

lost 8.48 points, or 0.13%, to 6,652.73, and the Nasdaq

Composite shed 58.07 points, or 0.26%, to 22,533.08.

Communication services stocks on the S&P 500

fell 1.3%, dragged by losses in Meta Platforms ( META ) and

Alphabet, which fell 1.9% and 1.4%, respectively. The

stocks also weighed on the Nasdaq.

Consumer discretionary shares lost 0.9% on the

S&P 500, while energy declined 1.1%. Technology

added 0.3%. A rise in healthcare stocks limited losses

on the Dow.

A Labor Department report showed job openings rose to

7.23 million in August, compared with 7.19 million estimated by

economists Reuters polled.

Another data point showed U.S. consumer confidence

declined more than expected in September.

Meanwhile, Fed Vice Chair Philip Jefferson warned the

job market could face stress without central bank support, while

Boston Fed President Susan Collins said she is open to

additional rate cuts.

Traders will also look to a busy slate of Fed speakers for

direction as they speak later in the day.

Equities have held up well through the third quarter, with

the benchmark S&P 500, the tech-heavy Nasdaq and

the blue-chip Dow Jones Industrial Average all set to

notch gains for the second straight quarter.

The benchmark S&P 500 is on track for its best

third-quarter performance since 2020.

Markets will now enter the fourth quarter, historically a

favorable stretch for equities due to year-end positioning and

holiday spending.

Earnings commentary will be in the spotlight during the

period, especially as several companies indicated plans to raise

prices, which could have implications for inflation and, by

extension, the Fed's policy path.

Chipmaker Wolfspeed surged 36.3% a day after

exiting bankruptcy. Firefly Aerospace ( FLY ) dropped 24.5%

after a testing mishap destroyed the core booster for its

centerpiece Alpha rocket.

Paychex ( PAYX ) fell 6%, to the bottom of the benchmark

index, after the HR platform reported its quarterly results.

Lamb Weston ( LW ) rose 7.8%, topping the S&P 500 after

the frozen-potato products maker

beat analysts' estimates

for first-quarter revenue and profit.

Declining issues outnumbered advancers by a 1.06-to-1

ratio on the NYSE and by a 1.27-to-1 ratio on the Nasdaq.

The S&P 500 posted 34 new 52-week highs and two new

lows, while the Nasdaq Composite recorded 63 new highs and 36

new lows.

(Reporting by Niket Nishant and Sukriti Gupta in Bengaluru;

Editing by Shilpi Majumdar, Anil D'Silva and Pooja Desai)