US STOCKS-Wall St loses ground as Trump's positive COVID-19 test adds to uncertainties

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* Stocks pare losses on White House reassurances, stimulus
hopes
* U.S. jobs growth slows more than expected in September
* Airline gain on news of possible new aid package
* Indexes down: Dow 0.37%, S&P 0.83%, Nasdaq 2.00%

(Updates to mid-afternoon, changes dateline, byline)
By Stephen Culp
NEW YORK, Oct 2 (Reuters) - The S&P 500 was lower on Friday
as news that U.S. President Donald Trump tested positive for
COVID-19 put investors in a risk-off mood and added to mounting
uncertainties surrounding the looming election.
All three major U.S. stock indexes were sharply lower
earlier in the session, but pared losses after the White House
provided assurances that Trump is not incapacitated, and
rebounded further following U.S. House of Representatives
Speaker Nancy Pelosi's announcement that an agreement to provide
another $25 billion in government assistance to the airline
industry was "imminent." All three were lower, but the blue-chip Dow's losses were
mitigated by gains in economically sensitive cyclical stocks.
Trump tweeted late Thursday that he had contracted the
coronavirus and would be placed under quarantine, compounding
the unknowns for an already volatile market.
"This could shift the landscape," said Oliver Pursche,
president of Bronson Meadows Capital Management in Fairfield,
Connecticut. "It's one more insecurity heading into a tight,
contentious election."
Data released on Friday showed the recovery of the labor
market could be losing steam. The U.S. economy added 661,000
jobs in September, fewer than expected and the slowest increase
since the recovery began in May. Payrolls remain a long way from regaining the 22 million
jobs lost since the initial shutdown, and the ranks of the
permanently unemployed are swelling.
The Dow Jones Industrial Average .DJI fell 102.01 points,
or 0.37%, to 27,714.89, the S&P 500 .SPX lost 28.19 points, or
0.83%, to 3,352.61 and the Nasdaq Composite .IXIC dropped
226.18 points, or 2%, to 11,100.33.
Eleven major sectors in the S&P 500, tech .SPLRCT suffered
the largest loss, while energy .SPNY and industrials .SPLRCI
enjoying the biggest percentage gains.
In a reversal from recent sessions, market leaders Apple Inc
AAPL.O , Microsoft Corp MSFT.O and Amazon.com AMZN.O were
down, providing the heaviest weight on the S&P and the Nasdaq.
Commercial air carriers rose on news off a possible new
round of government aid, with the S&P 1500 Airline index
.SPCOMAIR rising 1.7%.
Tesla Inc TSLA.O shares fell 6.3% after the electric car
maker's third quarter vehicle deliveries, while reaching a new
record, underwhelmed investors. House Democrats passed a $2.2 trillion fiscal aid package on
Thursday, but the bill is unlikely to be approved in the
Republican-controlled Senate. Partisan wrangling over the size and details of a new round
of stimulus have stalled, over two months after emergency
unemployment benefits expired for millions of Americans.
Advancing issues outnumbered declining ones on the NYSE by a
1.34-to-1 ratio; on Nasdaq, a 1.15-to-1 ratio favored decliners.
The S&P 500 posted five new 52-week highs and one new lows;
the Nasdaq Composite recorded 50 new highs and 26 new lows.