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Indexes down: Dow 0.26%, S&P 500 0.11%, Nasdaq 0.16%

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Firefly Aerospace ( FLY ) slides after rocket test mishap

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Wolfspeed ( WOLF ) stock soars following bankruptcy exit

(Updates with late-morning trading)

By Niket Nishant and Sukriti Gupta

Sept 30 (Reuters) -

The main U.S. stock indexes were on track to pare quarterly

gains on Tuesday as a looming government shutdown risked

delaying economic data, heightening investor anxiety around the

Federal Reserve's next move.

With valuations stretched, markets are banking on a

dovish Fed to keep the rally alive, making any disruption to the

central bank's visibility on economic data a source of concern.

While previous shutdowns have had a limited impact on

markets, some analysts warned the current episode could be more

disruptive, given the delicate economic backdrop.

"This could be more serious. Should any shutdown be

protracted, that could lead to other government economic

statistics being delayed," said David Morrison, senior market

analyst at Trade Nation.

With the outlook for upcoming reports unclear, markets

are leaning heavily on the data at hand.

A Labor Department report on Tuesday showed job openings

increased marginally in August, while hiring and layoffs

declined. Another data point showed U.S. consumer confidence

declined more than expected in September.

At 11:54 a.m. ET, the Dow Jones Industrial Average

fell 118.48 points, or 0.26%, to 46,197.59, the S&P 500

shed 7.66 points, or 0.11%, to 6,653.55, and the Nasdaq

Composite lost 36.78 points, or 0.16%, to 22,554.37.

Consumer discretionary shares lost 1.2% on the S&P

500, weighed by losses in Tesla and Amazon ( AMZN ),

which fell 1.8% and 1.5%, respectively. The stocks also weighed

on the Nasdaq.

The S&P 500 communication services sector fell

0.9%, dragged by losses in Meta Platforms ( META ) and Alphabet

, down 1.1% and 1.2%, respectively.

This was countered by a 0.6% gain in tech and a

0.8% rise in healthcare stocks.

The Dow was dragged down by American Express ( AXP ),

Goldman Sachs ( GS ) and JPMorgan ( JPM ), which declined 2.9%,

1.7% and 1.1%, respectively.

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 was

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 set to notch

gains for the second straight quarter.

Despite Tuesday's retreat, the S&P 500 is on track for

its best third-quarter performance since 2020.

In stocks, chipmaker Wolfspeed ( WOLF ) surged 54.1% a day

after exiting bankruptcy. Firefly Aerospace ( FLY ) dropped

23.5% following a testing mishap that destroyed the core booster

for its centerpiece Alpha rocket.

Lamb Weston ( LW ) rose 4.9%, 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 1.47-to-1

ratio on the NYSE and by a 1.77-to-1 ratio on the Nasdaq.

The S&P 500 posted 43 new 52-week highs and three new

lows, while the Nasdaq Composite recorded 80 new highs and 62

new lows.

(Reporting by Niket Nishant and Sukriti Gupta in Bengaluru;

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