US STOCKS-Wall St drops after two-day advance; jobs data mixed

* U.S. payrolls increase but wages fall

* Crude prices fall to April 2009 lows

* Bed, Bath & Beyond stumbles after results, outlook

* Indexes off: Dow 0.8 pct, S&P 0.7 pct, Nasdaq 0.4 pct (Updates to late afternoon)

By Caroline Valetkevitch

NEW YORK, Jan 9 (Reuters) - U.S. stocks declined in late Friday afternoon trading following a two-day rally as December's jobs reports gave a mixed view of the economy and as energy stocks fell alongside another drop in crude oil prices.

All three major indexes were on track to end the week lower.

U.S. nonfarm payrolls rose in December, topping Wall Street expectations, while November's surprising gain was also revised higher. However, wages declined.

"I don't necessarily think the wage decline is such a big deal but what it does tell you is that there is certainly no upward pressure on wages and so therefore it just signals slack in the labor market," said Ken Polcari, director of the NYSE floor division at O'Neil Securities in New York.

The S&P energy sector fell 0.4 percent. Global oil prices resumed their slide on Friday after two days of relative calm, with Brent and U.S. crude hitting their lowest since April 2009 on persistent worry over a global supply glut.

At 2:53 p.m. (1953 GMT), the Dow Jones industrial average was down 148.93 points, or 0.83 percent, to 17,758.94, the S&P 500 had lost 14.17 points, or 0.69 percent, to 2,047.97 and the Nasdaq Composite had dropped 20.98 points, or 0.44 percent, to 4,715.21.

Data separately showed U.S. wholesale inventories rose in November, also topping expectations and suggesting restocking may boost fourth-quarter growth.

The S&P 500 had added 3 percent in the previous two sessions, retracing a good portion of a 4.2 percent loss in the previous five trading days, on expectations the U.S. economy will continue to accelerate and hopes the European Central Bank will take more aggressive stimulus action in coming weeks.

A number of retail shares fell after reporting December sales and providing profit forecasts.

Bed, Bath & Beyond dropped 7 percent to $73.90 and was the S&P 500's biggest percentage decliner after the retailer forecast fourth-quarter earnings at the low end of expectations.

Declining issues outnumbered advancing ones on the NYSE by 1,880 to 1,124, for a 1.67-to-1 ratio on the downside; on the Nasdaq, 1,654 issues fell and 1,043 advanced for a 1.59-to-1 ratio favoring decliners.

The benchmark S&P 500 index was posting 42 new 52-week highs and 10 new lows; the Nasdaq Composite was recording 66 new highs and 40 new lows. (Additional reporting by Chuck Mikolajczak; Editing by Bernadette Baum, Nick Zieminski and James Dalgleish)