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* Fed's Harker does not see case for additional stimulus
* U.S. factory sector contracts
* Nordstrom jumps after profit beat
* ECB eyes stimulus package as growth looks weaker
* Indexes down: Dow 0.03%, S&P 0.28%, Nasdaq 0.61% (Changes comment, adds details; Updates prices)
By Akanksha Rana
Aug 22 (Reuters) - U.S. stocks turned lower on Thursday as the first contraction in the manufacturing sector in nearly a decade and uncertainty about future interest rate cuts overshadowed an initial boost from upbeat retail earnings.
IHS Markit said its "flash" survey on new orders for U.S. manufactured goods fell to 49.5 in August, over concerns whether the U.S.-China trade war would tip the economy into a recession. In response, yields on the U.S. two-year Treasury notes again moved above those of 10-Year bonds.
"Manufacturing has been pretty weak across the globe for a while now and we are starting to see that bleed into U.S.," said Joe Mallen, chief investment officer at Helios Quantitative Research. "It's not unexpected, but definitely not good for prospects of our economy going forward."
Adding to the downbeat mood, Philadelphia Federal Reserve Bank President Patrick Harker said he does not see the case for additional stimulus, while Kansas City Federal Reserve Bank President Esther George said she does not yet see a signal of a downturn in the U.S. economy.
Their comments sent jitters through markets ahead of a highly anticipated speech by Fed Chairman Jerome Powell on Friday at an annual gathering of central bankers in Jackson Hole.
The release of the minutes from the U.S. central bank's meeting on July 30-31 offered little clarity on its next move. The policymakers were deeply divided over their quarter-point cut in rates, but united in wanting to signal the move was not on a preset path to further cuts.
Despite the stock market stabilizing from a rough first half of August, investors are wary about how far policymakers are willing to cut rates and Powell's remarks may prove crucial to short-term sentiment.
At 11:19 a.m. ET, the Dow Jones Industrial Average was down 7.34 points, or 0.03%, at 26,195.39, the S&P 500 was down 8.07 points, or 0.28%, at 2,916.36. The Nasdaq Composite was down 48.87 points, or 0.61%, at 7,971.33.
Nine of the 11 major S&P sectors were lower with a 0.59% decline in technology weighing the most on the benchmark index. Interest-rate sensitive bank stocks gained as central bankers toned down expectations of aggressive rate cuts.
Leading gains on the S&P 500 was Nordstrom Inc, up 15.4%, as it joined Target Corp and Lowe's Cos Inc this week in delivering a quarterly profit beat and bolstering confidence in consumer demand.
L Brands Inc slid 7.8% after the Victoria's Secret owner reported quarterly sales short of estimates.
Declining issues outnumbered advancers for a 1.33-to-1 ratio on the NYSE and a 1.86-to-1 ratio on the Nasdaq.
The S&P index recorded 32 new 52-week highs and four new lows, while the Nasdaq recorded 49 new highs and 43 new lows. (Reporting by Akanksha Rana and Medha Singh in Bengaluru; Editing by Shounak Dasgupta)