*

Eli Lilly ( LLY ) falls after late-stage data for oral weight-loss

drug

*

Weekly jobless claims rise to highest level in a month

*

Indexes: Dow down 0.8%, S&P 500 down 0.5%, Nasdaq down

0.2%%

(Updates to afternoon trading)

By Caroline Valetkevitch

NEW YORK, Aug 7 (Reuters) - The three major U.S. stock

indexes fell on Thursday, with shares of Intel ( INTC ) down after U.S.

President Donald Trump demanded that the Intel ( INTC ) CEO resign, while

investors digested a report on the president's top pick for the

Federal Reserve chair.

Bloomberg reported that Fed Governor Christopher Waller was

Trump's top candidate for the U.S. central bank's chair post.

Trump has been critical of current Chair Jerome Powell for

holding off on cutting borrowing costs. Many investors expect

the Fed to cut interest rates in September.

Chipmaker Intel was down 3.7% after Trump called

for the immediate resignation of new Intel ( INTC ) CEO Lip-Bu Tan,

calling him "highly conflicted" due to his ties to Chinese

firms.

Apple ( AAPL ) shares rose 3% after the latest tariff salvo

from Trump largely exempted industry heavyweights from his

threat to impose 100% levy on chips and semiconductors.

The U.S. president announced a tariff of about 100% on

imports of semiconductors, but said it would not apply to

companies that are manufacturing in the U.S. or have committed

to do so.

Trump's higher tariffs on imports from dozens of countries

kicked in on Thursday, raising the average U.S. import duty to

its highest in a century.

"The market rally is beginning to look a little bit tired

here. We ran up on earnings, and of course the market was

basically ignoring a lot of the tariff news," said Peter

Cardillo, chief market economist at Spartan Capital Securities

in New York.

The Dow Jones Industrial Average fell 333.27 points,

or 0.75%, to 43,859.85, the S&P 500 lost 28.61 points, or

0.45%, to 6,316.45 and the Nasdaq Composite lost 50.62

points, or 0.24%, to 21,118.81.

Nvidia ( NVDA ) and Broadcom ( AVGO ) shares were down

slightly.

Trump is also anticipated to announce his interim

replacement for Fed Governor Adriana Kugler in the coming days

amid expectations that the nominee would be a policy dove who

will likely favor bringing interest rates lower.

Rate cut expectations remained largely the same after the

day's data on the labor market.

Weekly initial jobless claims rose 7,000 to a seasonally

adjusted 226,000, the highest level since the week ended July 5

and slightly above the 221,000 estimate of economists polled by

Reuters, according to the data.

Market expectations for a September rate cut of at least 25

basis points from the Fed stood at 93.2%, down slightly from the

94.6% in the prior session and well above the 37.7% from a week

ago, according to CME's FedWatch Tool.

In other decliners, shares of drugmaker Eli Lilly ( LLY )

dropped 14.3% after it reported data on its late-stage oral

weight-loss drug. The drugmaker also raised its full-year profit

forecast.

Declining issues outnumbered advancers by a 1.12-to-1 ratio

on the NYSE. There were 206 new highs and 68 new lows on the

NYSE.

On the Nasdaq, 1,705 stocks rose and 2,749 fell as declining

issues outnumbered advancers by a 1.61-to-1 ratio.

(Additional reporting by Nikhil Sharma and Pranav Kashyap in

Bengaluru; Editing by Maju Samuel and Aurora Ellis)