(For a Reuters live blog on U.S., UK and European stock

markets, click or type LIVE/ in a news window.)

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Weekly jobless claims at 225,000

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US service sector activity accelerates to 1-1/2-year high

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Levi Strauss tumbles after saying it is exploring unit

sale

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East, Gulf coast workers' strike enters third day

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Indexes: Dow down 0.32%, S&P 500 up 0.10%, Nasdaq up 0.45%

(Updated at 10:07 a.m. ET/1407 GMT)

By Johann M Cherian and Purvi Agarwal

Oct 3 (Reuters) -

Wall Street's main indexes were mixed on Thursday after data

showed strong service activity in the world's largest economy,

while cautious investors watched for any escalation in the

Middle East conflict.

The benchmark S&P 500 pared losses after the Institute for

Supply Management survey showed service sector activity, which

makes up the majority of the U.S. economy, stood at 54.9 in

September, compared with an estimate of 51.7, according to

economists Reuters polled.

However, separate data showed weekly jobless claims rose

marginally last week. Next up is Friday's nonfarm payrolls

report for September.

Odds of a 25-basis-point cut at the Federal Reserve's

November meeting now stand at 64.9%, up from 50.7% a week ago,

according to the CME Group's FedWatch Tool.

The Dow Jones Industrial Average fell 137.01 points,

or 0.32%, to 42,059.51, the S&P 500 gained 5.62 points,

or 0.10%, to 5,716.01, and the Nasdaq Composite gained

83.86 points, or 0.45%, to 18,006.65.

Eight of the 11 S&P 500 sectors opened lower. However,

infotech shares were the biggest gainers, with a 1.3%

rise.

Rate-sensitive heavyweights were mixed, with Amazon.com ( AMZN )

down 0.8%, Apple ( AAPL ) losing 0.1%, while Nvidia ( NVDA )

rose 4.5%.

Yields on two-year and 10-year Treasury bonds

inched higher and were last up 3.68% and 3.8%,

respectively.

Investors have been wary over the last two sessions as they

contemplated the scale of Israel and the United States' response

to Iran's recent attack on Israel. The CBOE volatility index,

Wall Street's fear gauge, hovered at more than three-week

highs at 19.22.

"We'll see some cautiousness due to two factors: the war

headlines that continue to impact the equities market and

tomorrow's unemployment data," said Peter Cardillo, chief market

economist, Spartan Capital Securities.

"We'll probably have a mixed market session today as

investors' cautiousness rises ahead of tomorrow's key macro data

of the month."

Investors will also assess comments from Fed

policymakers Raphael Bostic and Neel Kashkari later in the day.

U.S. stocks have rallied for much of the year, with the

benchmark S&P 500 confirming a bull rally and logging

gains in eight of the previous nine months on expectations of

lower borrowing costs. Tech stocks led the charge,

with AI integration expected to boost their earnings.

Meanwhile, a workers' strike on the East and Gulf coasts

entered its third day. Morgan Stanley economists said a

prolonged stoppage could raise consumer prices, with food prices

likely to react first.

Among other movers, oil stocks such as Chevron ( CVX ) and

Exxon Mobil ( XOM ) edged higher after four sessions of gains,

as crude prices rose more than 2%.

Levi Strauss slid 7.2% after the company said it

was considering a sale of its underperforming Dockers brand and

forecast fourth-quarter revenue below expectations.

Constellation Brands ( STZ ) dropped 2.1% after the beer

maker maintained its sales and profit forecast for fiscal year

2025.

Declining issues outnumbered advancers by a 2.61-to-1

ratio on the NYSE, and by a 1.57-to-1 ratio on the Nasdaq.

The S&P 500 posted 15 new 52-week highs and two new

lows, while the Nasdaq Composite recorded 31 new highs and 60

new lows.