US STOCKS-Mounting job losses, Chevron, techs sink Wall St

* Chevron's outlook adds to earnings gloom

* December jobs data shows labor market worsening

* Nasdaq off 2 pct; S&P 500 and Dow shed over 1 pct

* For up-to-the-minute market news, click [STXNEWS/US] (Updates to midday)

By Ellis Mnyandu

NEW YORK, Jan 9 (Reuters) - U.S. stocks dropped on Friday after government data showed that the labor market worsened in December, heightening investors' fears about the outlook for profits and a deepening recession.

Payrolls were slashed a bit less than expected but the U.S. jobless rate climbed to its highest in nearly 16 years, pressuring already fragile consumer spending.

Energy shares fell after Chevron Corp (CVX.N) joined a growing list of bellwether companies warning about their profit outlooks. Its stocks slid 1.2 percent.

Technology shares also took a beating, causing the Nasdaq to briefly wipe out its 2009 gains, led lower by shares of Apple Inc (AAPL.O) , off more than 2 percent. Cisco Systems (CSCO.O) slid nearly 5 percent.

"We just keep seeing bad news. That's all we ever see," said Ryan Detrick, senior technical strategist at Schaeffer's Investment Research in Cincinnati, Ohio. "We really have to see the economy, housing show some type of life."

The Dow Jones industrial average .DJI slid 102.82 points, or 1.18 percent, to 8,639.64. The Standard & Poor's 500 Index .SPX fell 14.19 points, or 1.56 percent, to 895.54. The Nasdaq Composite Index .IXIC declined 31.84 points, or 1.97 percent, to 1,585.17.

Thus far in 2009, the Dow is off 1.6 percent, while the S&P 500 is down about 1 percent.

The sell-off caused the benchmark S&P 500 to trim its advance since its Nov. 21 intraday bear-market low to about 19 percent.

While payrolls were slashed a bit less than expected -- 524,000 people lost their jobs rather than the 550,000 seen in a Reuters poll -- December's cuts put losses for 2008 at 2.6 million, the most since 1945. For more see [ID:nN09282664].

When warning about its outlook, Chevron, a Dow component and the second-largest U.S. oil and gas company, cited the impact of lower energy prices on its exploration and production business. [ID:nN0844693].

Chevron shares fell to $73.04, while those of rival Exxon Mobil Corp (XOM.N) declined 1.6 percent to $77.81. On Nasdaq, shares of Apple, the maker of the iPhone, dropped 2.3 percent to $90.62. The semiconductor index .SOXX was off more than 3 percent.