Sept 9 (Reuters) - Wall Street indexes held steady on Thursday as weekly jobless claims fell to a near 18-month low, allaying fears of a slowing economic recovery. The Labor Department said initial claims for state unemployment benefits dropped 35,000 to a seasonally adjusted 310,000 for the week ended Sept. 4, the lowest level since mid-March 2020. read more The economy-sensitive S&P 500 financial sector index (.SPSY) and the banking sub-index (.SPXBK) were among the top gainers, rising about 0.7% each. JPMorgan (JPM.N), Wells Fargo (WFC.N), Citi Group (C.N) and Morgan Stanley (MS.N) gained between 1.1% and 1.6%, tracking a slight rise in benchmark bond yields following the data. Six of the 11 major S&P 500 sectors were higher in early afternoon trading, with the defensive real estate (.SPLRCR), utilities (.SPLRCU) and consumer staples (.SPLRCS) falling the most. "This jobs data is counter-intuitive to the way market are moving because it provides a reason for the Federal Reserve to pull back its asset purchases sooner, a factor that has weighed on markets recently," said Jeff Powell, managing partner at Polaris Wealth Advisory Group. The S&P 500 (.SPX) and the Dow Jones (.DJI) were little changed after gaining in early trading, hinting they were set to snap a three-day losing streak. Investor mood has been glum this week after a recent monthly jobs report showed a slowdown in U.S. hiring amid worries over a fading recovery. Uncertainties over the U.S. Federal Reserve"s stimulus tapering timeline has also been a drag on sentiment. "Bull markets will continue to climb a wall of worry and while people are worried about inflation and COVID-19 and the Fed, the market seems to be nervously optimistic in their trades with earnings expectations being positive for the coming quarters," Polaris"s Powell said. At 12:26 p.m. ET, the Dow Jones Industrial Average (.DJI) was down 1.01 points, or 0.00%, at 35,030.06, the S&P 500 (.SPX) was down 1.05 points, or 0.02%, at 4,513.02, and the Nasdaq Composite (.IXIC) was up 35.66 points, or 0.23%, at 15,322.30. Video game retailer GameStop Corp (GME.N) fell 3.2% on the company"s silence on its turnaround plan in its first post-earnings conference call by new Chief Executive Matt Furlong. read more Reports that Beijing slowed down approval for all new online video games sent shares of U.S.-listed gaming stocks Activision Blizzard Inc (ATVI.O), Electronic Art Inc (EA.O), and Take-Two Interactive Software Inc (TTWO.O) down between 1% and 2.7%. read more Data center REIT Digital Realty (DLR.N) slid 4% to be the top decliner among real estate stocks after the company announced a public offering of 6.25 million shares. Advancing issues outnumbered decliners by a 1.44-to-1 ratio on the NYSE and by a 1.70-to-1 ratio on the Nasdaq. The S&P index recorded 26 new 52-week highs and one new low, while the Nasdaq recorded 57 new highs and 27 new lows.