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Oil prices jump amid geopolitical tensions

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Levi Strauss gains after co raises FY profit forecast

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Weekly jobless claims increase more than expected

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Indexes: Dow down 1.4%; S&P 500 down 1.2%, Nasdaq down

1.4%

(Updates to 1630 ET)

By Caroline Valetkevitch

NEW YORK, April 4 (Reuters) - The three major U.S. stock

indexes fell more than 1% each and the S&P 500 had its biggest

daily percentage drop since Feb. 13 on Thursday as Federal

Reserve officials took a cautious approach in comments on the

outlook for interest rate cuts, and investors braced for

Friday's U.S. monthly jobs report.

Investors also digested comments from U.S. President Joe

Biden, who called for an immediate ceasefire in a call with

Israel Prime Minister Benjamin Netanyahu over the Gaza war. Oil

prices climbed amid the geopolitical tensions.

All of the major S&P 500 sectors fell on the day, led by a

1.7% drop in technology, while defense-related shares

like Lockheed Martin ( LMT ) gained.

Among the comments by Fed officials, Minneapolis Fed Bank

President Neel Kashkari said that at the U.S. central bank's

meeting last month he penciled in two rate cuts this year but

that if inflation continues to stall, none may be required this

year.

Earlier on Thursday, Richmond Fed President Thomas Barkin

said the U.S. central bank has "time for the clouds to clear" on

inflation before starting to cut rates.

On Wednesday, Fed officials including U.S. central bank

chief Jerome Powell stuck with a cautious rate-cut strategy.

"It's a very careful, measured approach," said Paul Nolte,

senior wealth adviser and market strategist for Murphy & Sylvest

in Elmhurst, Illinois.

In addition, he said, "there's some nervousness coming into

that (jobs) report" on Friday.

The Cboe Volatility index posted its highest close

since Nov. 1.

Stocks were higher early in the day following U.S. jobless

claims data that helped to underpin rate-cut hopes. The data

showed the number of Americans filing new claims for

unemployment benefits increased more than expected last week.

The Dow Jones Industrial Average fell 530.16 points,

or 1.35%, to 38,596.98, the S&P 500 lost 64.28 points, or

1.23%, to 5,147.21 and the Nasdaq Composite dropped

228.38 points, or 1.4%, to 16,049.08.

Friday's jobs data could hold more clues on the labor market

and inflation.

Economists polled by Reuters expect the nonfarm payrolls for

March to fall to 200,000 from 275,000 in February, while the

unemployment rate will likely remain steady at 3.9%.

Money markets still currently expect a near 60% chance of at

least a 25 basis-point rate cut in June, according to the CME

Group's FedWatch tool.

On the plus side, Levi Strauss shares jumped 12.4%

after the apparel maker raised its annual profit forecast,

citing savings from its recent cost-cutting measures and fewer

discounts.

Volume on U.S. exchanges was 11.99 billion shares, compared

with the 11.73 billion average for the full session over the

last 20 trading days.

Declining issues outnumbered advancing ones on the NYSE by a

1.76-to-1 ratio; on Nasdaq, a 1.69-to-1 ratio favored decliners.

The S&P 500 posted 55 new 52-week highs and 6 new lows; the

Nasdaq Composite recorded 108 new highs and 98 new lows.