Updates to mid-session trading

By Johann M Cherian and Shashwat Chauhan

Dec 17 (Reuters) - Wall Street's main indexes fell on Wednesday, with the S&P 500 and the Nasdaq at three-week lows on the back of declines in heavy-weight technology stocks as investors weighed a report on funding hurdles for Oracle's data center plans.

Oracle ORCL.N fell 5% after a report said the cloud company's largest data center partner Blue Owl Capital OWL.N said it will not back a $10 billion deal for its next facility.

Worries about the broader technology sector turning to debt in trying to achieve its artificial intelligence goals have plagued risk-taking multiple times this quarter.

At 11:39 a.m. ET, the Dow Jones Industrial Average .DJI fell 105.49 points, or 0.22%, to 48,008.04, the S&P 500 .SPX lost 53.59 points, or 0.79%, to 6,746.67 and the Nasdaq Composite .IXIC lost 292.03 points, or 1.26%, to 22,816.43.

Six of the 11 major S&P subsectors were trading lower, with technology .SPLRCT down 1.9%. The benchmark index is on track for its fourth-straight session of declines.

A Reuters report said that Alphabet's GOOGL.O Google is working on a new initiative to erode Nvidia's software advantage. The company's shares lost 2.6%, while AI bellwether Nvidia NVDA.O fell 1.8% to hit a three-week low, sending a broader chips index .SOX down 3%.

"It does appear there is now real market fatigue in this singular AI infrastructure story, and the circularity issue in revenue, the rationalization of capex, and the fact that not all players can win at once, are seemingly becoming more accepted by markets," said David Bahnsen, chief investment officer at the Bahnsen Group.

In the latest on who could take control of Warner Bros Discovery WBD.O, the media company's board rejected Paramount Skydance's PSKY.O $108.4 billion hostile bid, favoring Netflix's NFLX.O binding offer.

Netflix's shares rose 1.2%, while Paramount and Warner Bros were down 4.9% and 1.3%, respectively.

Energy stocks such as ConocoPhillips COP.N and Occidental Petroleum OXY.N gained over 2% each, tracking a 2% jump in crude prices as U.S. President Donald Trump ordered a "blockade" of all sanctioned oil tankers entering and leaving Venezuela.

Lennar LEN.N shed 5.6% as the homebuilder missed fourth-quarter profit estimates.

WHAT THE FED THINKS

Offering some relief for investors was Federal Reserve Governor Christopher Waller, often viewed as a dove on monetary policy. He said that the central bank still had room to cut interest rates against a softening jobs market.

The S&P 500 hit a three-week low on Tuesday after a key jobs report failed to offer enough clarity on the health of the labor market and analysts pointed to the likelihood of data distortion due to the recent government shutdown.

The next significant report will be Thursday's consumer inflation data by the Commerce Department.

With two weeks left in the year, Wall Street is set to log its third-straight set of annual gains, buoyed by rate cut expectations and enthusiasm over artificial intelligence.

However, concerns over tech valuations have sparked a rotation into small caps .RUT and other areas of the market including healthcare .SPXHC and banks .SPXBK.

Declining issues outnumbered advancers by a 1.11-to-1 ratio on the NYSE and by a 1.32-to-1 ratio on the Nasdaq.

The S&P 500 posted nine new 52-week highs and no new lows, while the Nasdaq Composite recorded 69 new highs and 99 new lows.

(Reporting by Johann M Cherian and Shashwat Chauhan in Bengaluru; Editing by Maju Samuel)

((johann.mcherian@thomsonreuters.com; Shashwat.Chauhan@thomsonreuters.com))