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December US job growth beats expectations

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Insurers slip as loss estimates from LA fires increase

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Delta up after strong FY forecast

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Indexes off: Dow 1.31%, S&P 500 1.55%, Nasdaq 2.02%

(Updates for markets open)

By Johann M Cherian and Sukriti Gupta

Jan 10 (Reuters) -

Wall Street's main indexes fell on Friday, with the S&P 500

touching a one-week low after an upbeat jobs report stoked fresh

inflation worries and reinforced bets that the Federal Reserve

will take a cautious approach to interest rate cuts this year.

Along with the day's declines of about 1.9%, the

domestically focused small-cap Russell 2000 index was on

course to plunge into a correction, having fallen about 10% from

its record high hit in late November.

At 10:01 a.m. the Dow Jones Industrial Average fell

555.96 points, or 1.31%, to 42,074.56, the S&P 500 lost

90.46 points, or 1.55%, to 5,826.73 and the Nasdaq Composite

lost 390.73 points, or 2.02%, to 19,085.99.

A Labor Department report showed job growth unexpectedly

accelerated in December while the unemployment rate fell to 4.1%

as the labor market ended the year on a solid footing.

Traders now see the central bank lowering borrowing

costs for the first time in June and then staying steady for the

rest of the year, according to the CME Group's FedWatch Tool.

Pressuring stocks, the yield on the 30-year Treasury

note spiked over 5% - its highest since November

2023, while Wall Street's fear gauge touched a more than

two-week high.

Eight of the 11 S&P 500 sectors declined, led by a 1.8%

drop in technology stocks, while rate-sensitive

financials and real-estate also lost 1% each.

"It's a good news report. It's very positive for the

economy, but the markets are worried that a strong economy is

going to be inflationary," said Thomas Martin, senior portfolio

manager at Globalt Investments.

Adding to the dour mood, a University of Michigan survey

showed consumer mood dropped to 73.2 in January from the

previous month.

Wall Street's main indexes are poised to close their second

consecutive week in the red, with the benchmark S&P 500

down nearly 4% from its record high hit a month ago.

Fresh inflation worries have taken the spotlight, compelling

the Fed to issue a cautious forecast on monetary easing last

month, as it anticipates policy changes on trade and immigration

under President-elect Donald Trump, who is expected to take

office in 10 days time.

Multiple reports on his plans, including one on imposing a

national economic emergency to fast track tariff implementation,

have left investors on edge about their potential impact on the

economy and global trade.

Voting members on the Federal Open Market Committee have

voiced the need for a measured approach to lowering borrowing

costs this year, the latest being St. Louis Fed President

Alberto Musalem according to a report.

Chip stocks such as Nvidia ( NVDA ) dropped 3.2%, weighed

down by a report that the U.S. could announce new export

regulations as early as Friday.

Delta Air Lines ( DAL ) rose 10.6% after forecasting a

higher-than-expected annual adjusted profit. Earnings reports

will be in full swing next week.

Insurance companies such as Mercury General ( MCY )

slumped 21.3% and Travelers fell 2.3% on expectations of

high industry losses from

wildfires in Los Angeles

.

Declining issues outnumbered advancers by a 4.39-to-1

ratio on the NYSE and by a 3.74-to-1 ratio on the Nasdaq.

The S&P 500 posted five new 52-week highs and 22 new

lows, while the Nasdaq Composite recorded 20 new highs and 119

new lows.