(For a Reuters live blog on U.S., UK and European stock markets, click LIVE/ or type LIVE/ in a news window)

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U.S. private payrolls rise more than expected

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Initial weekly jobless claims fall

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Tesla drops as sales of China-made vehicles fall

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Indexes down: Dow 0.91%, S&P 0.90%, Nasdaq 1.07%

Jan 5 (Reuters) - Wall Street's main indexes were in the red on Thursday as fresh evidence of a tight labor market and hawkish comments from policymakers deepened fears of elevated interest rates for longer than expected.

Thursday's ADP National Employment report showed a higher-than-expected rise in private employment in December. Another report showed weekly jobless claims fell last week.

On Wednesday, another data set showed a moderate fall in U.S. job openings, growing evidence the labor market remains tight.

Among the benchmark S&P 500's 11 major sectors, real estate , which was the biggest percentage gainer on Wednesday, was leading percentage losses down 2.6%, with utilities next, falling 2.1%.

While a strong labor market would often be welcomed as a sign of economic strength investors currently see it as a key reason for the Federal Reserve to keep interest rates high.

"It's very clear that good news on the labor market means bad news for the stock market. Data is showing that the labor market is very resilient," said Anthony Saglimbene, chief market strategist at Ameriprise in Tory Michigan.

"As long as the labor market is resilient, the Federal Reserve has to continue to tighten financial conditions to bring inflation down," said that strategist who expects investors to be keenly focused on wage inflation in Friday's jobs report.

By 2:27PM ET, the Dow Jones Industrial Average fell 302.88 points, or 0.91%, to 32,966.89, the S&P 500 lost 34.86 points, or 0.90%, to 3,818.11 and the Nasdaq Composite dropped 112.01 points, or 1.07%, to 10,346.75.

However, the indexes had pared losses a little on Thursday after St. Louis Federal Reserve leader James Bullard in an afternoon appearance that 2023 could finally bring some welcome relief on the inflation front.

While Saglimbene noted that Bullard's comments were not surprising, his suggestion that rate hikes were starting to show some signs of dampening inflation, provided some reassurance.

In the previous session, Wall Street's main indexes erased some of their gains after minutes from the Fed's December meeting showed the central bank was laser-focused on fighting inflation even as officials agreed to slow the pace of rate hikes to limit risks to economic growth.

Earlier in the day both Kansas City Fed leader Esther George and Atlanta President Raphael Bostic stressed that the central bank's priority was to curb inflation through policy tightening.

Traders see rates peaking at slightly above 5% in June.

The more comprehensive non farm payrolls report due on Friday, will be looked to for further clues on labor demand and the rate hike trajectory.

Among individual stocks, Tesla Inc dropped 2.6% after December sales of its China-made electric vehicles fell to a five-month low, while Amazon.com Inc, which announced increased layoff plans, was down 1.5%.

Walgreens Boots Alliance Inc dropped 6.7% after the drugstore chain posted a quarterly loss on an opioid litigation charge.

Home goods retailer Bed Bath & Beyond Inc was down 24% after saying it was exploring options, including bankruptcy.

Declining issues outnumbered advancing ones on the NYSE by a 1.69-to-1 ratio; on Nasdaq, a 1.41-to-1 ratio favored decliners.

The S&P 500 posted 7 new 52-week highs and 7 new lows; the Nasdaq Composite recorded 49 new highs and 61 new lows. (Reporting by Sinéad Carew in New York, Shubham Batra, Bansari Mayur Kamdar and Ankika Biswas in Bengaluru; Editing by Arun Koyyur, Shounak Dasgupta and David Gregorio)