(For a Reuters live blog on U.S., UK and European stock

markets, click or type LIVE/ in a news window)

*

US weekly jobless claims decline

*

Tesla rises on plans to launch full self-driving software

*

JetBlue ( JBLU ) jumps after Q3 revenue forecast hike

*

Indexes off: Dow 0.89%, S&P 500 0.55%, Nasdaq 0.07%

(Updated at 12:03 p.m. ET/1603 GMT)

By Johann M Cherian and Purvi Agarwal

Sept 5 (Reuters) - Wall Street's three main indexes

slipped in choppy trading on Thursday as a short-lived boost

from a services activity survey fizzled out ahead of an upcoming

employment report.

The nonfarm payrolls data for August is due on Friday amid

worries of a slowdown in the economy, while focus continues to

be on the Federal Reserve's interest rate cut that is expected

later this month.

Investors assessed a mixed set of reports on Thursday,

including a decline in weekly jobless claims and an ADP survey

which showed employers hired the fewest number of workers in

3-1/2 years in August.

Traders' bets for a 25-basis point reduction in interest

rates at the Fed's September meeting now stand at 61%, according

to the CME Group's FedWatch Tool. Bets for a larger 50-bps cut

rose to 39% from 34% a week earlier.

With a rate cut at the Fed meeting almost certain, the

uncertainty lies in its size as a larger cut could indicate

deeper concerns about economic stability, Melissa Brown,

managing director of applied research at SimCorp, said.

Soothing some concerns, an Institute for Supply Management

survey showed services sector activity, rose to 51.5 in August,

above expectations of 51.1.

At 12:03 p.m. the Dow Jones Industrial Average fell

365.31 points, or 0.89%, to 40,609.66, the S&P 500 lost

30.56 points, or 0.55%, to 5,489.51, and the Nasdaq Composite

lost 11.79 points, or 0.07%, to 17,072.51.

September has been historically weak for U.S. equities, with

the benchmark S&P 500 down about 1.2% for the month on average

since 1928. The index is down more than 2% so far this week and

tech stocks have fallen over 4%.

Nine of the 11 S&P 500 sectors were in the red, led by

healthcare stocks' 1.7% decline. The consumer

discretionary sector rose 0.8%, with Tesla among the

top boosts.

Tesla added 3.2% after the electric-vehicle maker

said it will launch its full self-driving advanced driver

assistance software in the first quarter next year in Europe and

China, pending regulatory approval.

AI chip firm Nvidia ( NVDA ) edged up 0.4% after falling

more than 11% in the previous two sessions.

Other megacap stocks also rebounded, with Amazon.com ( AMZN )

rising 2.1%, while Apple ( AAPL ) and Alphabet

added more than 0.3% each.

Frontier Communications dropped 9.3% after Verizon

said it would buy the company in an all-cash deal worth

$20 billion.

JetBlue Airways ( JBLU ) jumped 8.6% after the carrier

raised its third-quarter revenue forecast.

Leading up to the U.S. presidential elections, Goldman Sachs

analysts said Democratic presidential candidate Kamala Harris'

proposed corporate tax hike could lower earnings for companies

on the S&P 500 index by about 5%, while Republican candidate

Donald Trump's proposed relief would boost earnings by about 4%.

Declining issues outnumbered advancers for a 1.42-to-1 ratio

on the NYSE and a 1.51-to-1 ratio on the Nasdaq.

The S&P 500 posted 39 new 52-week highs and nine new lows,

while the Nasdaq Composite recorded 31 new highs and 97 new

lows.