US STOCKS-Futures slip on caution ahead of employment data

* Investors cautious ahead of September employment report

* Wal-Mart sees slow U.S. recovery

* Factory orders on tap

* For up-to-the-minute market news, click [STXNEWS/US] (Updates with quote; adds byline)

By Angela Moon

NEW YORK, Oct 2 (Reuters) - U.S. stock index futures slipped on Friday as cautious investors awaited a key report on labor market conditions after other data this week suggested the nascent economic recovery may be losing momentum.

The Dow and S&P 500 indexes suffered their worst one-day fall in three months on Thursday after manufacturing and jobless reports fueled fears about the recovery's strength. A broad sell-off left major indexes down as much as 3 percent.

The U.S. Labor Department's employment report on Friday is expected to show the jobless rate in the world's largest economy rose to a 26-year high in September of 9.8 percent, according to analysts polled by Reuters. The report is due at 8:30 a.m. [1230 GMT].

"The market is in a wait-and-see mode after a reality check this week with weak economic numbers. It was a change of pace for the market that has been accustomed to data exceeding expectations," said Peter Boockvar, equity strategist at Miller Tabak & Co in New York.

"Investors are worried whether this trend will continue with the employment report."

Signs of a weak recovery also came from the chairman of Wal-Mart Stores Inc , the world's biggest retailer. Rob Walton said he sees a slow recovery from challenging U.S. business conditions, while Wal-Mart's Asia operations are "a little better." For details, see [ID:nSIN440594]

Global stock markets fell ahead of the U.S. jobs data. European shares hit a four-week low and Japan's Nikkei average slid 2.5 percent to a two-month closing low. [ID:nL296155] and [ID:nT305932]

The Commerce Department releases August factory orders at 10:00 a.m. [1400 GMT] Economists in a Reuters poll see orders rising 0.3 percent from a 1.3 percent increase the prior month.

Energy shares will likely be pressured as U.S. crude oil futures dropped 1.6 percent.

S&P 500 futures were off 2.3 points and were slightly below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures lost 27 points, and Nasdaq 100 futures were down 5.25 points.

Stocks in the spotlight included General Electric Co after Chief Executive Jeffrey Immelt said the company is holding discussions on partnerships or an initial public offering for its NBC Universal unit. [ID:nBOM441667]

GE, a Dow component, was off 0.4 percent to $15.91 in premarket trading.

CIT Group Inc , which lends to small and mid-sized companies, launched a debt-exchange plan on Thursday that it hopes will prevent a bankruptcy filing. [ID:nN01265054]

Automakers were also in focus a day after they reported a 23 percent fall in September U.S. auto sales, as showrooms emptied after the government-funded "cash for clunkers" program. (Editing by Padraic Cassidy)