Updates to afternoon

By Stephen Culp

Nov 6 (Reuters) - U.S. stocks turned lower on Thursday, approaching two-week lows with a resumption of Tuesday's tech selloff as investors contended with mounting economic uncertainty and stretched valuations.

All three major U.S. equity indexes again slid on worries over inflated stock prices, particularly from artificial intelligence-related momentum shares.

The Philadelphia SE Semiconductor index .SOX dropped 1.6%.

AI-adjacent shares provided muscle to the rally in recent months that pushed the indexes to a series of record-setting highs, so weakness in the sector was a stark reminder of Wall Street's reliance on tech.

"We've been through a period of very rapid gains, which have been narrowly focused in individual securities," said Michael Green, chief strategist at Simplify Asset Management in Philadelphia. "We're seeing a vacillation right now between the high-volatility stocks low-volatility 'safe' stocks."

"Those two are just like literally going back and forth for the past couple of, you know, past couple of weeks," Green added.

As the government shutdown persists, market participants must contend with a dearth of economic indicators while the data-reliant U.S. Federal Reserve is assessing the need for further near-term interest rate cuts.

With government sources dark, alternative, private sector sources have stepped in. On Thursday, executive outplacement firm Challenger, Gray & Christmas reported that corporations announced a 183.1% monthly surge in layoffs, marking the worst October in over two decades. Cost cutting and AI-related efforts were among the top reasons companies provided.

Separately, workforce analytics company Revelio Labs showed the U.S. economy shed 9,100 jobs last month, with government accounting for the bulk of the decline.

"The Challenger layoffs came in as disappointing, raising the prospect that the labor market is weakening faster and more than the Fed seems to be aware of," Green said. "That’s led to some repricing of the December rate cut that Powell suggested was very much up for debate in this last speech."

On Wednesday, the U.S. Supreme Court heard arguments over whether President Donald Trump's market-rattling tariffs represented an overreach of presidential power.

The Dow Jones Industrial Average .DJI fell 273.71 points, or 0.58%, to 47,037.29, the S&P 500 .SPX lost 51.43 points, or 0.76%, to 6,744.86 and the Nasdaq Composite .IXIC lost 321.15 points, or 1.37%, to 23,178.65.

Among the 11 major sectors of the S&P 500, consumer discretionary .SPLRCD was the biggest drag, sliding 2.0%. Energy .SPNY enjoyed the largest percentage increase.

Third-quarter earnings season approached its home stretch, with 424 companies in the S&P 500 having reported. Of those, 83% have beaten Wall Street estimates, according to the most recent LSEG data.

Analysts now expect year-on-year S&P 500 earnings growth of 16.8%, on aggregate, for the July-September period. That marks a significant improvement over the 8.0% annual growth analysts predicted at the beginning of the quarter, per LSEG.

DoorDash DASH.O slumped 16.0% after the delivery firm reported third-quarter profit below Wall Street expectations on rising expenses.

Cosmetics-maker Elf Beauty ELF.N forecast annual sales and profit below expectations, and its shares tumbled 35.7%.

Snap SNAP.N jumped 11.7% after the social media firm beat third-quarter revenue estimates and announced a partnership with Perplexity AI.

Marvell Technology MRVL.O advanced 2.3% after Bloomberg reported that SoftBank explored a potential takeover of the company.

Declining issues outnumbered advancers by a 1.77-to-1 ratio on the NYSE. There were 118 new highs and 181 new lows on the NYSE.

On the Nasdaq, 1,367 stocks rose and 3,224 fell as declining issues outnumbered advancers by a 2.36-to-1 ratio.

The S&P 500 posted 16 new 52-week highs and 21 new lows while the Nasdaq Composite recorded 77 new highs and 216 new lows.

(Reporting by Stephen Culp; Additional reporting by Twesha Dikshit and Purvi Agarwal in Bengaluru; Editing by David Gregorio)

((stephen.culp@thomsonreuters.com;))