Sept 3 (Reuters) - The S&P 500 and the Dow fell on Friday as a slowdown in U.S. jobs growth raised questions about the pace of the economic recovery, while the tech-heavy Nasdaq rose as the report also calmed fears of an imminent tapering in monetary policy. Nine of the 11 S&P sectors were down by early afternoon, with economically sensitive industrials (.SPLRCI) and financial (.SPSY) stocks leading declines. Banking stocks (.SPXBK), which generally perform better when bond yields are higher, dropped 0.6% even as the benchmark 10-year Treasury yield jumped following the report. "The number"s a big disappointment and it"s clear the Delta variant had a negative impact on the labor economy this summer," said Michael Arone, chief investment strategist at State Street Global Advisors in Boston. "You can tell because leisure and hospitality didn"t add any jobs and retail actually lost jobs. Investors will conclude that perhaps this will put the (Federal Reserve) further on hold in terms of the timing of tapering. Markets may be okay with that." The S&P 500 and the Nasdaq had scaled all-time highs over the past few weeks on support from robust corporate earnings, but investors had recently grown cautious on hawkish signals from the Fed and a jump in infections. The labor market remains the key touchstone for the Fed, with Chair Jerome Powell hinting last week that reaching full employment was a pre-requisite for the central bank to start paring back its asset purchases. On Friday, the Labor Department"s closely watched report showed nonfarm payrolls increased by 235,000 jobs in August, widely missing economists" estimate of 750,000. Payrolls had surged 1.05 million in July. read more By 12:02 p.m. ET, the Dow Jones Industrial Average (.DJI) and the S&P 500 (.SPX) were down 0.3% and 0.1%, respectively, with economy-linked industrial stocks including General Electric (GE.N), 3M (MMM.N) and Boeing (BA.N) falling between 0.2% and 1.7%. The Nasdaq Composite (.IXIC), on the other hand, rose 0.07%, boosted by technology heavyweights, including Apple (AAPL.O), Alphabet (GOOGL.O), and Facebook (FB.O). Tech stocks tend to perform better in a low interest-rate environment. Chinese ride-hailing firm Didi Global (DIDI.N) gained 1.8% after a media report that the city of Beijing was considering moves that would give state entities control of the company. read more Biotechnology firm Forte Biosciences (FBRX.O) slumped 81.4% to be among the top decliners across U.S. exchanges after its experimental treatment for eczema, a skin disease, failed to meet its main goal. Declining issues outnumbered advancers for a 1.98-to-1 ratio on the NYSE and a 1.80-to-1 ratio on the Nasdaq. The S&P index recorded 32 new 52-week highs and one new low, while the Nasdaq recorded 93 new highs and 16 new lows.