US STOCKS-Wall St sinks as taper acceleration worries pile onto virus angst

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

* Communications services, materials lead sector declines

* Fed's Powell floats dropping "transitory" label for inflation

* U.S. consumer confidence ebbs in November

* Indexes down: Dow 1.44%, S&P 1.34%, Nasdaq 1.25% (Updates prices, adds commentary, byline)

By Devik Jain, Ambar Warrick and Sinéad Carew

Nov 30 (Reuters) - Wall Street's main indexes fell more than 1% on Tuesday after Federal Reserve Chair Jerome Powell signaled that the U.S. central bank would consider speeding up its withdrawal of bond purchases as inflation risks increase, piling pressure onto a market already nervous about the latest COVID-19 variant.

In a testimony before the Senate Banking Committee, Powell indicated that he no longer considers high inflation as "transitory" and that the Fed would revisit the timeline for scaling back its bond buying program at its next meeting in two weeks.

While investors were already in a selling mood due to uncertainty around the impact of the Omicron coronavirus variant, it did not help that Powell's comments also prompted speculation about an potential acceleration in interest rate hikes.

"The principal contributor to the decline in stock prices today is the Powell commentary, regarding the upcoming Fed meeting, about accelerating the tapering of their bond buying program, which obviously leads to the prospect that rate hikes come sooner next year," said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.

"That somewhat hawkish shift in tone caught the market flatfooted," Luschini said.

Meanwhile, the market also faced uncertainty about how dangerous the Omicron variant could be, the degree to which current vaccinations could offer protection and the additional restrictions governments will have to impose that could hurt the economy, Luschini added.

"The market's going to have a pall cast over it until we have more evidence as to exactly what this new variant is going to mean," he said. By 2:34 p.m. ET (1934 GMT), the Dow Jones Industrial Average fell 507.06 points, or 1.44%, to 34,628.88, the S&P 500 lost 62.39 points, or 1.34%, to 4,592.88 and the Nasdaq Composite dropped 197.39 points, or 1.25%, to 15,585.45.

The declines were broad-based, with all the 11 major S&P sectors down. Communication services was the lead decliner, dropping more than 2%, followed by materials and energy. S&P 500 Banks were down 1.7%.

While the Food and Drug Administration said it hopes to have information about the effectiveness of current COVID-19 vaccines against Omicron, vaccine companies appeared to be divided.

BioNTech's chief executive told Reuters the BioNTech and Pfizer COVID-19 vaccine will likely offer strong protection against severe disease from the variant, while Moderna Inc's CEO told the Financial Times that COVID-19 shots are unlikely to be as effective against the new variant as they have been previously.

Moderna shares were down 4%, while Regeneron Pharmaceuticals Inc fell about 2% after it said its COVID-19 antibody treatment and other similar drugs could be less effective against Omicron.

Travel and leisure stocks slumped, with S&P 1500 Airlines and the S&P 1500 Hotels, Restaurant and Leisure indexes both sliding around 2% over concerns of more border restrictions to curb the spread of the new variant.

The small-cap Russell 2000 index was down 1.9%.

The uncertainty has triggered fresh alarm at a time when supply chain logjams are weighing on economic recovery and central banks globally are contemplating a return to pre-pandemic monetary policy to tackle a surge in inflation.

Meanwhile, data showed U.S. consumer confidence slipped in November amid concerns about the rising cost of living and relentless COVID-19 pandemic.

Declining issues outnumbered advancing ones on the NYSE by a 4.77-to-1 ratio; on Nasdaq, a 3.32-to-1 ratio favored decliners.

The S&P 500 posted seven new 52-week highs and 43 new lows; the Nasdaq Composite recorded 24 new highs and 559 new lows. (Reporting by Devik Jain and Ambar Warrick in Bengaluru; Editing by Marguerita Choy and Sriraj Kalluvila)