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* Apple, Microsoft lead 2 pct drop in tech stocks
* U.S. ready with tariffs if China talks unsuccessful-Navarro
* Tepid jobs report kindles bets for fewer rate hikes
* Indexes drop: Dow 1.19 pct, S&P 1.28 pct, Nasdaq 1.82 pct
* Death cross: S&P 50-day moving avg falls below 200-day avg (Adds comments, updates to early afternoon)
By Shreyashi Sanyal
Dec 7 (Reuters) - Wall Street fell more than 1 percent on Friday, with a drop in technology stocks sparking a turnaround from earlier in the day, as renewed concerns of the China-U.S. trade situation offset the effect of a jump in oil prices and a tepid U.S. jobs report.
The trade standoff between Washington and Beijing has been a major overhang on equities for most of this year and this week has seen the markets sell off on diminishing hopes that their truce, brokered last weekend, would help resolve differences.
These concerns were fanned on Friday by White House trade adviser Peter Navarro's comments that U.S. officials would raise tariff rates if the two countries could not come to an agreement during the 90-day negotiating period.
Earlier, a Labor Department report showed nonfarm payrolls increased by a less-than-expected 155,000 jobs last month. The data was tepid enough to lower bets for faster future interest rate hikes without fanning fears of an economic slowdown.
Stock futures pared losses after the report and the three major indexes moved higher shortly after the open. But the bump was short lived.
"The payrolls data was weaker-than-expected, but at the same time it was sort of a Goldilocks report, and if we didn't have the lingering U.S.-China trade issue, then the markets would have reacted much more positively," said Candice Bangsund, vice president and portfolio manager at Fiera Capital in Montreal.
"The underlying tone in the market today is risk aversion and it really doesn't take much to rattle investors in this kind of environment."
The S&P technology, trade-sensitive industrials and healthcare indexes slid more than 2 percent, while six other sectors fell between 1 percent and 2 percent.
Apple Inc, Microsoft Corp, Amazon.com Inc and Alphabet Inc were all down 2 percent or more and were the biggest drags on the S&P and the Nasdaq.
At 1:03 p.m. ET the Dow Jones Industrial Average was down 297.17 points, or 1.19 percent, at 24,650.50, the S&P 500 was down 34.42 points, or 1.28 percent, at 2,661.53 and the Nasdaq Composite was down 130.85 points, or 1.82 percent, at 7,057.41.
The S&P's 50-day moving average fell below its 200-day moving average in intraday trading, a phenomenon known as a "death cross" and one that stands as a bearish near-term signal only if it holds through the close.
The three major indexes are set to end the week about 4 percent lower and have erased a large chunk of the near 5 percent gains last week that mostly came after the Federal Reserve signaled it was nearing the end of its rate hike cycle.
Energy stocks rose 1.22 percent after crude oil prices jumped as big Middle East producers in OPEC agreed to reduce output to drain global inventories and support the market.
The energy and the defensive utilities were the only two among the 11 major S&P sectors to trade higher.
Altria Group Inc rose 1.2 percent after the Marlboro cigarette maker took a $1.8 billion stake in Canadian cannabis producer Cronos Group Inc, whose U.S.-listed shares jumped 24.6 percent.
Declining issues outnumbered advancers for a 1.25-to-1 ratio on the NYSE and a 1.56-to-1 ratio on the Nasdaq.
The S&P index recorded 11 new 52-week highs and 19 new lows, while the Nasdaq recorded 12 new highs and 123 new lows. (Reporting by Shreyashi Sanyal in Bengaluru; Editing by Saumyadeb Chakrabarty and Shounak Dasgupta)