* Indexes off: Dow 1.23%, S&P 500 1.12%, Nasdaq 1.38%

* Goldman Sachs ( GS ) delays next Fed rate-cut forecast to

September

* Oil surges as tankers set ablaze in Middle East

* Morgan Stanley ( MS ) falls 4% on private credit jitters

(Updates after market open and prices)

By Johann M Cherian and Utkarsh Hathi

March 12 (Reuters) - Wall Street's major indexes fell 1%

on Thursday, with financial stocks taking a blow, as a surge in

oil prices toward $100 a barrel rekindled inflation fears and

investors kept a close watch on mounting jitters in the private

credit sector.

Crude prices jumped after two tankers were set ablaze in

Iraqi waters in apparent Iranian strikes, as part of wider

attacks on oil and transport facilities across the Middle East.

Iranian Supreme Leader Mojtaba Khamenei said the Strait of

Hormuz should remain closed as a tool of pressure.

S&P 500 airline stocks, highly sensitive to fuel

costs, fell 3.4% and are on track for their biggest monthly

losses in a year. Cruise operators Norwegian and Royal

Caribbean also fell more than 2.5%.

Energy companies Occidental gained 3.3% and

ConocoPhillips ( COP ) rose over 1.4%.

Investors are also scrutinizing the roughly $2 trillion

private credit market following a string of credit issues that

have surfaced in recent months and Swiss private equity firm

Partners Group warned private credit default rates could double

in the next few years.

Morgan Stanley ( MS ) fell 4.3% after limiting redemptions

at one of its private credit funds following similar actions by

Blackstone and BlackRock ( BLK ) earlier this month.

Blackstone and BlackRock ( BLK ) were down over 1% each.

JPMorgan Chase ( JPM ) reduced the value of some loans to

private credit funds on Thursday.

The broader S&P 500 financials sector dropped 1.5%,

with banks Citigroup ( C ) and Goldman Sachs ( GS ) down over

3%.

"The question is how many people have this on their books.

Where is it being marked? Are they derivatives? We need to keep

a very close eye on that as things unravel quickly," said Joe

Saluzzi, co-head of equity trading at Themis Trading.

At 9:55 a.m. ET, the Dow Jones Industrial Average

fell 582.01 points, or 1.23%, to 46,835.26, the S&P 500

lost 76.10 points, or 1.12%, to 6,699.50 and the Nasdaq

Composite lost 312.95 points, or 1.38%, to 22,403.18.

The CBOE volatility index, Wall Street's fear gauge,

was up 2.53 points at 26.77, while the rate-sensitive Russell

small-caps index lost 1.8%.

Global markets have been roiled this month as the

U.S.-Israeli war with Iran has disrupted oil and gas supplies

and sent crude prices sharply higher, complicating global

central banks' plans to ease monetary policy.

Goldman Sachs ( GS ) pushed its forecast for the Federal Reserve's

next rate cut to September, from June earlier. Money market

futures show traders now see only one quarter-point cut by

December, down from two cuts before the conflict.

The International Energy Agency said that the world is

facing the biggest oil supply disruption ever.

Additionally, Washington said it was launching two new trade

investigations into excess industrial capacity in 16 major

trading partners and into forced labor, in a long-telegraphed

move, to rebuild tariff pressure.

Dating app operator Bumble jumped 37% on Thursday

after reporting fourth-quarter revenue above estimates.

Discount retailer Dollar General ( DG ) fell 7.3% after

forecasting annual comparable sales below estimates.

Chemical companies LyondellBasell and Dow

rose 3.7% and 5.7% respectively after a Citigroup ( C ) upgrade on new

export opportunities from supply chain disruption in the Middle

East.

On the data front, weekly jobless claims fell last week,

which could help to assuage fears of a labor market

deterioration after an unexpected decline in employment in

February.

Declining issues outnumbered advancers by a 3.44-to-1 ratio

on the NYSE and by a 3.07-to-1 ratio on the Nasdaq.

The S&P 500 posted nine new 52-week highs and 12 new

lows, while the Nasdaq Composite recorded 18 new

highs and 62 new lows.