US STOCKS-Wall St hits session lows on concerns about Iraq
* Obama warns of U.S. action as jihadists push on Baghdad
* Oil hits year's high on Iraq violence; energy shares climb
* Lululemon falls on results
* Dow off 0.7 pct; S&P 500 down 0.7 pct; Nasdaq off 0.9 pct (Updates to mid-afternoon)
By Angela Moon
NEW YORK, June 12 (Reuters) - U.S. stocks fell to session lows on Thursday afternoon as concerns escalated about Iraq and after disappointing economic data on consumers and the labor market.
Hours after ethnic Kurdish forces took control of the oil hub of Kirkuk after the Shi'ite-led government's troops abandoned their posts, President Barack Obama was asked if he might order drone strikes or other action to halt the insurgency that has seized much of northern Iraq this week.
Obama told reporters that he refused to rule out U.S. action in Iraq against Sunni Islamist militants who have surged out of the north toward Baghdad, threatening to divide the country and establish their own jihadist state.
The stock market's losses quickly accelerated following Obama's comments, with industrials and consumer discretionary sectors leading the decline. Continuación...