(Updates to afternoon)

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September NFP at +119,000 vs +50,000 estimate

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Walmart ( WMT ) up after raising annual forecast

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Indexes down: Dow 0.6%, S&P 500 1.1% and Nasdaq 1.6%

By Caroline Valetkevitch

NEW YORK, Nov 20 (Reuters) -

Wall Street stocks fell on Thursday in a sharp reversal from

an early rally, as technology gains faded after a boost from

Nvidia's ( NVDA ) earnings and U.S. jobs data muddied the labor market

outlook.

Nvidia ( NVDA ) was last down 2.5% after surging as much as

5% earlier in the day. Most chip-related companies also turned

negative, with the Philadelphia SE Semiconductor index

now down 3.4%.

Investors have worried about lofty technology valuations amid

concerns over steep artificial intelligence spending, with the

Nasdaq now sharply off its October high.

In addition, data showed the U.S. unemployment rate rose in

September even as employers added more jobs than economists had

expected. Traders now see an increasing chance of a Federal

Reserve interest rate cut in December.

Jed Ellerbroek, portfolio manager at Argent Capital

Management in St. Louis, said it is difficult to pinpoint what

caused the market's reversal.

"I expected the market to be up today just based on the

strength of Nvidia's ( NVDA ) earnings and the recent skepticism about AI

investment. Nvidia's ( NVDA ) earnings obviously dispelled a bunch of

those fears," he said.

"We've been in kind of a defensive type of trading action for

the last two weeks, so it could be a continuation of that."

The consumer staples sector rose 1.1% to lead the S&P

500 in gains, while technology was down the most.

The Dow Jones Industrial Average fell 272.72 points, or

0.59%, to 45,867.80; the S&P 500 lost 73.63 points, or

1.10%, to 6,568.53; and the Nasdaq Composite slipped

357.60 points, or 1.58%, to 22,206.63.

Nvidia ( NVDA ), the world's most valuable company, forecast sales above

analysts' estimates for the fourth quarter and surpassed

expectations for third-quarter revenue.

In addition, Nvidia ( NVDA ) CEO Jensen Huang shrugged off concerns

about AI on a call with analysts, saying, "We see something very

different."

Among gainers, Walmart ( WMT ) advanced after the retailer

raised its annual forecast for the second time this year and set

a December date to change its stock listing to the Nasdaq from

the NYSE.

Declining issues outnumbered advancers by a 2.54-to-1 ratio on

the NYSE, where there were 87 new highs and 210 new lows.

On the Nasdaq, 1,427 stocks rose and 3,209 fell as declining

issues outnumbered advancers by a 2.25-to-1 ratio.

(Additional reporting by Shashwat Chauhan and Twesha Dikshit in

Bengaluru; Editing by Anil D'Silva, Krishna Chandra Eluri, Maju

Samuel and Richard Chang)