(Updates to market close)

By Stephen Culp

NEW YORK, Jan 2 (Reuters) - Wall Street see-sawed to a

lower close on Thursday amid choppy trading, as investors

embarked on the new year facing the cross-currents of solid

labor market data, a rising dollar and tumbling Tesla shares.

All three major U.S. stocks ended the session in negative

territory, a reversal of an earlier rally but off session lows.

"We had some macro news but somewhat mixed and you know we

have a very strong dollar today," said Peter Cardillo, chief

market economist at Spartan Capital Securities in New York.

"There are a few hurdles over the next couple of weeks and those

are next Friday's employment data and the beginning of fourth

quarter earnings."

"In the short term, we're looking at choppiness and a

struggle for direction until we get those hurdles out of the

way," Cardillo added.

Shares of Tesla sank after reporting its first

annual drop in deliveries, as incentives failed to stem a

decline in demand for its aging line-up of electric vehicles.

A report from the Labor Department showed initial and

continuing claims for unemployment benefits both fell last week,

supporting the narrative of a solid jobs market and adding

weight to the possibility that the U.S. central bank could let

its key interest rate stand at this month's policy meeting.

Looking past uncertainties regarding the pace of interest

rate cuts from the Federal Reserve, policies to be enacted by

the incoming Donald Trump administration and various hot spots

of geopolitical unrest, market participants chose to focus on

the strength of the United States economy.

Wall Street's main indexes notched double-digit gains in

2024, with the benchmark S&P 500 recording its best two-year run

since 1997-1998. Those gains were driven by the U.S. Federal

Reserve's first rate cuts in three-and-a-half years, the ongoing

artificial intelligence boom and expectations of pro-business

policies from the incoming Trump administration.

The rally lost steam in the closing weeks of 2024, with the

S&P 500 and the Dow marking declines for December, as markets

priced in the likelihood of fewer rate cuts from the Fed this

year.

According to preliminary data, the S&P 500 lost 12.86

points, or 0.22%, to end at 5,868.77 points, while the Nasdaq

Composite lost 29.78 points, or 0.15%, to 19,281.01. The

Dow Jones Industrial Average fell 145.09 points, or

0.34%, to 42,399.13.

The S&P and the Nasdaq have now posted five consecutive

sessions in the red, their longest losing streak since

mid-April.

Apple ( AAPL ) shares slid as the gadgetmaker offered rare

discounts in China in order to compete against domestic rivals.

Crypto stocks such as Coinbase, MicroStrategy ( MSTR )

and MARA Holdings ( MARA ) advanced, tracking higher

Bitcoin prices.