US STOCKS-Wall Street sinks as tech sell-off continues

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* August nonfarm payrolls rise by 1.37 mln
* Stay-at-home stocks lose ground again
* Shares of big U.S. lenders advance
* Indexes down: Dow 2.11%, S&P 2.80%, Nasdaq 4.19%

(Adds comment, details; Updates prices)
By Medha Singh and Devik Jain
Sept 4 (Reuters) - Wall Street's main indexes extended
declines on Friday, with the Nasdaq on track for its worst
two-day fall since March as technology stocks sold off again,
overshadowing data showing a steeper-than-expected drop in the
August unemployment rate.
The tech-heavy Nasdaq lost over 4% and the S&P 500 dropped
below its February peak, as the indexes lost ground for the
second straight day after hitting record closing highs on
historic stimulus and a narrow rally in heavyweight technology
stocks.
Mega-cap companies Apple Inc AAPL.O , Microsoft Inc
MSFT.O , Amazon.com Inc AMZN.O and Facebook Inc FB.O , which
were down between 4.5% and 5.9%, weighed heavily on the indexes.
"It's just position squaring ... not surprising since we've
seen a pretty sizable run up in the tech space in the last three
or four weeks," said Jack Janasiewicz, portfolio strategist at
Natixis Investment Managers in Greater Boston Area.
Earlier on Friday, the Labor Department's closely watched
employment report showed jobless rate fell to 8.4% from 10.2% in
July, steeper than economists' forecast of 9.8%. Nonfarm
payrolls, however, increased less than expected last month.
The data highlighted a patchy recovery in the labor market,
adding pressure on the White House and Congress to restart
stalled negotiations over the next coronavirus relief package to
lift the economy out of the worst recession since the Great
Depression.
Technology .SPLRCT , communication services .SPLRCL and
consumer discretionary .SPLRCD stocks posted the largest
percentage declines among the major S&P sectors.
Bank stocks .SPXBK , which have lagged the broader market
this year, bucked the trend and rose 0.5%.
"There are segments of the cyclical trade that you might be
starting to see some rotation in to, but I don't think it's the
big picture value-growth trade reversal yet," Janasiewicz said.
Fund managers warned Thursday's declines may be a preview of
a rocky two months ahead as institutional investors return from
summer vacations and refocus on potential economic pitfalls.
The run-up to the Nov. 3 U.S. presidential election is also
expected to add to the volatility. Wall Street's fear gauge
.VIX hit a more than 11-week high.
At 11:28 a.m. ET, the Dow Jones Industrial Average .DJI
was down 597.13 points, or 2.11%, at 27,695.60, the S&P 500
.SPX was down 96.62 points, or 2.80%, at 3,358.44. The Nasdaq
Composite .IXIC was down 479.88 points, or 4.19%, at
10,978.22.
The Nasdaq was set for its biggest two-day fall since March
11, while S&P 500 and Dow headed for their worst two-day decline
since June 11 and June 12, respectively.
Broadcom Inc AVGO.O gained 2.3% after the Apple Inc
AAPL.O supplier forecast fourth-quarter revenue above
analysts' estimates. Declining issues outnumbered advancers for a 4.29-to-1 ratio
on the NYSE and a 4.01-to-1 ratio on the Nasdaq.
The S&P index recorded no new 52-week highs and no new low,
while the Nasdaq recorded 18 new highs and 77 new lows.