* 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: Quote, Profile, Research) 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: Quote, Profile, Research) , off more than 2 percent. Cisco Systems (CSCO.O: Quote, Profile, Research) slid nearly 5 percent.