US STOCKS-Wall St slips from record highs after U.S. kills top Iranian commander

* U.S. air strike in Iraq kills head of Iran's Quds Force
* Bank stocks fall as U.S. bond yields slide
* Energy stocks, gold miners track higher commodity prices
* Tesla opens at record high after Q4 deliveries beat
* Indexes off: Dow 0.84%, S&P 500 0.77% , Nasdaq 0.80%

(Updates to open)
By Manas Mishra
Jan 3 (Reuters) - Wall Street's major indexes fell from
record highs on Friday after a U.S. air strike in Iraq killed a
top Iranian commander, sharply escalating geopolitical tensions
in the Middle East and sending investors scurrying to safe-haven
assets.
Iran vowed revenge after Qassem Soleimani, head of its elite
Quds Force, was killed in the air strike that was authorized by
President Donald Trump. Benchmark bond yields US10YT=RR fell to their lowest level
since Dec. 12, dragging down bank shares, including those of
Bank of America Corp BAC.N and Citigroup Inc C.N . Nine of
the 11 major S&P 500 sectors were in the red.
"The market is just on edge and giving up a large portion of
yesterday's gains," said Robert Pavlik, chief investment
strategist at SlateStone Wealth LLC in New York.
"There is a question of what this (air strike) is going to
turn into and if it's going to be something long lasting."
The CBOE Volatility index .VIX , an options-based gauge of
investor anxiety, hit its highest level since Dec. 10.
At 10:22 a.m. ET, the Dow Jones Industrial Average .DJI
was down 243.50 points, or 0.84%, at 28,625.30, the S&P 500
.SPX was down 24.97 points, or 0.77%, at 3,232.88. The Nasdaq
Composite .IXIC was down 72.91 points, or 0.80%, at 9,019.28.
The three main indexes had closed at record highs on
Thursday as fresh steps by China's central bank to boost its
economy added to investor optimism over trade and the global
outlook.
But denting sentiment further on Friday, data showed the
U.S. manufacturing sector contracted in December by the most in
more than a decade. Benefiting from higher gold prices, miners Newmont Goldcorp
NEM.N , Kirkland Lake KL.N and Barrick Gold GOLD.N gained
between 0.7% and 1.2%.
Weapons makers Lockheed Martin LMT.N and Northrop Grumman
NOC.N added more than 3% each.
Meanwhile, American Airlines Group Inc AAL.O and Southwest
Airlines Co LUV.N fell 4.9% and 2.4%, respectively, as oil
prices jumped about 4%. In a bright spot, Tesla Inc's TSLA.O shares hit a fresh
record after beating Wall Street estimates for vehicle
deliveries in its fourth quarter and meeting the low-end of its
full-year delivery goal. Declining issues outnumbered advancers for a 1.61-to-1 ratio
on the NYSE and for a 2.65-to-1 ratio on the Nasdaq.
The S&P index recorded nine new 52-week highs and one new
low, while the Nasdaq recorded 14 new highs and eight new lows.