US STOCKS-Wall St falls as jobs data supports Sept rate hike

* July nonfarm payrolls 215,000 vs 223,000 est

* Groupon (NasdaqGS: GRPN - news) falls after results miss expectations

* Nvidia (Swiss: NVDA.SW - news) up after revenue beats estimates

* Indexes down: Dow 0.20 pct, S&P 0.16 pct, Nasdaq 0.16 pct (Updates to open)

By Tanya Agrawal

Aug 7 (Reuters) - U.S. stocks fell in early trading on Friday, with the major indexes poised to close in the red for the week, after solid job growth in July pointed to an improving economy, opening the door wider for an interest rate hike in September.

Wall Street, however, took a dim view of the report as a rate hike will increase borrowing costs for companies. The market has touched record highs, benefiting from near-zero interest rates for the last 10 years.

Nonfarm payrolls increased 215,000 last month, fewer than the 223,000 forecast by economists, but the unemployment rate held at a seven-year low of 5.3 percent.

"It's enough to keep the Fed on track to raise raises in September, but it's not enough to end the debate," said John Briggs, head of cross asset strategy at RBS Securities in Stamford, Connecticut.

The Fed has said it will raise rates only when it sees a sustained recovery in the economy. An improving labor market is key to Fed's decision to raise rates.

"I think if we have a disastrous employment report next month, that could give them pause," said Brad McMillan, chief investment officer for Commonwealth Financial in Waltham, Massachusetts.

At 9:56 a.m. ET (1356 GMT) the Dow Jones industrial average was down 35.28 points, or 0.2 percent, at 17,384.47, the S&P 500 was down 3.35 points, or 0.16 percent, at 2,080.21 and the Nasdaq composite was down 8.08 points, or 0.16 percent, at 5,048.36.

Six of the 10 major S&P sectors were lower with the health index's 0.51 percent fall leading the decliners. The Nasdaq biotechnology index fell to a one-month low.

Wall Street ended sharply lower on Thursday as weak earnings reports from media companies stirred fears that more viewers are ditching cable TV, dragging the sector to its worst two-day loss since the financial crisis.

Earnings continue to remain in focus. With about three-quarters of the S&P 500 companies having reported, second-quarter earnings are estimated to have increased 1.6 percent while revenues are projected to have fallen 3.4 percent, according to Thomson Reuters (Dusseldorf: TOC.DU - news) data.

Nvidia's shares rose 9.6 percent to $22.41, a day after the chipmaker reported a surprise rise in second-quarter revenue.

Groupon fell 3.7 percent to $4.51 after the company's quarterly results missed expectations.

Noodles slumped 20 percent to $12.17 after the pasta and sandwich restaurant chain forecast full-year adjusted profit and revenue below analysts' estimates.

Declining issues outnumbered advancing ones on the NYSE by 1,495 to 1,226. On the Nasdaq, 1,387 issues fell and 991 advanced.

The S&P 500 index showed two new 52-week highs and eight new lows, while the Nasdaq recorded 12 new highs and 75 new lows. (Reporting by Tanya Agrawal; Editing by Saumyadeb Chakrabarty)