* Indexes off: Dow 1.17%, S&P 500 1.05%, Nasdaq 1.36%

* 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 prices throughout, details, and analyst comments)

By Johann M Cherian and Utkarsh Hathi

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

over 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 3.7% and are on track for their biggest monthly

losses in a year. Cruise operators Norwegian and Royal

Caribbean fell 2.8% and 7% respectively.

Energy stocks rose, with Occidental gaining 5.9% and

ConocoPhillips ( COP ) rising 3%, while the S&P 500 Fertilizers

and Agricultural Chemicals sector climbed more than

5%.

Also underwhelming markets were concerns over the $2

trillion private credit market after Swiss private equity firm

Partners Group warned default rates could double in the next few

years.

Morgan Stanley ( MS ) fell 4% 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 3.4% and 1.6% respectively.

"A high percentage of (private credit) holdings tend to be

upstart software companies," said Art Hogan, chief market

strategist at B. Riley Wealth.

"They were likely seen as having an exit strategy at some

point in time this year and it seems like that window to come

public has closed a bit for software companies while it's been

under pressure. So that's part of the problem with the

mark-to-market that is going on with private credit, private

equity."

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%.

Meanwhile, Fed Vice Chair for Supervision Michelle Bowman

said that large bank capital requirements will fall slightly

under revised drafts of sweeping bank capital rules.

At 11:53 a.m. ET, the Dow Jones Industrial Average

fell 553.49 points, or 1.17%, to 46,861.34, the S&P 500

lost 71.01 points, or 1.05%, to 6,704.79 and the Nasdaq

Composite lost 308.66 points, or 1.36%, to 22,407.48.

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

was up 1.71 points at 25.94, while the rate-sensitive Russell

small-caps index lost 1.6%.

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 ) now sees the Fed cutting rates in September,

and 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 34% on Thursday

after reporting fourth-quarter revenue above estimates.

Discount retailer Dollar General ( DG ) fell 4% after

forecasting annual comparable sales below estimates.

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 3.23-to-1 ratio

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

The S&P 500 posted 15 new 52-week highs and 17 new

lows while the Nasdaq Composite recorded 26 new

highs and 120 new lows.