US STOCKS-Wall Street drops more than 1% on domestic growth worries

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* Sept. U.S. private payrolls grow slower than expected
* Ford falls as quarterly auto sales drop
* Activision Blizzard down on Bernstein rating cut
* Lennar up on better-than-expected profit
* Indexes down: Dow 1.26%, S&P 1.28%, Nasdaq 1.35%

(Updates to open)
By Medha Singh and Arjun Panchadar
Oct 2 (Reuters) - U.S. stocks fell more than 1% for the
second straight session on Wednesday, hitting a fresh one-month
low, as September's weak private payrolls report added to
concerns of a slowdown in the world's largest economy.
U.S. private employers hired fewer-than-expected workers in
September, the ADP National Employment Report showed, pointing
to weakness in the labor market. The report, a precursor to the Labor Department's more
comprehensive jobs report due on Friday, followed a contraction
in U.S. manufacturing activity to its lowest level in more than
a decade.
That hit investor faith in the strength of the domestic
economy, a key reason for a rally in the benchmark index this
year, wiping off the third-quarter gains on the S&P 500 .SPX
and Dow .DJI .
Both indexes slipped below their 100-day moving averages for
the first time in about a month on Wednesday, seen as a strong
technical support level that could presage further losses.
The benchmark index is now about 4% below its all-time high
hit in July, after coming within striking distance of it two
weeks ago.
"The weakening conditions in Europe and the slowdown in
China, it's all adding up to the same thing essentially: worries
that the global economy is slowing and giving investors reason
to pause and take profits," said Robert Pavlik, chief investment
strategist manager at SlateStone Wealth LLC in New York.
The industrial .SPLRCI and materials .SPLRCM sectors
dropped about 1.5% each, posting the biggest declines among the
11 major S&P sectors.
The Federal Reserve, which cut interest rates for the second
time this year in September, has indicated it would rely on
economic data to determine future rate cuts. The Fed's next
policy meeting will be held at the end of the month.
At 10:00 a.m. ET, the Dow Jones Industrial Average .DJI
was down 333.54 points, or 1.26%, at 26,239.50, the S&P 500
.SPX was down 37.60 points, or 1.28%, at 2,902.65. The Nasdaq
Composite .IXIC was down 106.61 points, or 1.35%, at 7,802.07.
Activision Blizzard Inc ATVI.O dropped 3.8% after
Bernstein downgraded the videogame maker's shares to "market
perform".
Ford Motor Co F.N shares fell 3.6% after the carmaker
reported an about 5% fall in U.S. auto sales for the third
quarter. Shares of General Motors Co GM.N dipped 3.5% ahead of
its quarterly auto sales report.
In a bright spot, homebuilder Lennar Corp LEN.N gained
1.6% after the company reported a better-than-expected profit as
cheaper mortgage rates led to higher demand for its homes.
Johnson & Johnson JNJ.N jumped 2.1% and was the only stock
trading in the positive territory on the Dow. The drugmaker said
on Tuesday it will pay $20.4 million to settle claims by two
Ohio counties, allowing it to avoid an upcoming federal trial
seeking to hold the industry responsible for the nation's opioid
epidemic. Declining issues outnumbered advancers for a 5.07-to-1 ratio
on the NYSE and a 5.08-to-1 ratio on the Nasdaq.
The S&P index recorded three new 52-week highs and 11 new
lows, while the Nasdaq recorded two new highs and 131 new lows.