Updates to afternoon
September NFP at +119,000 vs +50,000 estimate
Walmart up after raising annual forecast
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 earnings and U.S. jobs data muddied the labor market outlook.
Nvidia NVDA.O 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 .SOX 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 earnings and the recent skepticism about AI investment. Nvidia's 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 .SPLRCS rose 1.1% to lead the S&P 500 in gains, while technology .SPLRCT was down the most.
The Dow Jones Industrial Average .DJI fell 272.72 points, or 0.59%, to 45,867.80; the S&P 500 .SPX lost 73.63 points, or 1.10%, to 6,568.53; and the Nasdaq Composite .IXIC slipped 357.60 points, or 1.58%, to 22,206.63.
Nvidia, 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 CEO Jensen Huang shrugged off concerns about AI on a call with analysts, saying, "We see something very different."
Among gainers, Walmart WMT.N 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)
((caroline.valetkevitch@thomsonreuters.com))
