* Sept factory activity down in US, China
* Apple down 2.1 pct; biggest drag on the three indexes
* Dunkin falls after weak full-year forecast
* Indexes down: Dow 0.59 pct, S&P 0.31 pct, Nasdaq 0.57 pct (Adds details, changes comment, updates prices)
By Abhiram Nandakumar and Tanya Agrawal
Oct 1 (Reuters) - Wall Street started the last quarter of the year in the red on Thursday as Apple fell and investors parsed mixed U.S. data.
Apple was down 2.2 percent at $107.83 on a report that chip suppliers were concerned the iPhone maker would cut chip orders for the fourth quarter. The stock was the biggest drag on the three major indexes.
The Institute for Supply Management's (ISM) index of national factory activity fell to 50.2 in September, its lowest since May 2013.
New jobless claims rose modestly last week but remained near 15-year lows. Also, a gauge of the trend in claims fell.
Mixed signals from the data could complicate the Federal Reserve's plans to raise interest rates this year.
Wall Street rallied on Wednesday as investors bought beaten-down stocks, with biotechs rising for a second day after a recent bout of sustained selling.
"Markets opened modestly lower after yesterday's big rally and then the ISM number came out just barely above 50," said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago.
"Stocks are recovering a little bit, but it goes on the side of the ledger that indicates that the U.S. and the global economies are certainly not growing at a robust rate."
All eyes will now be on the crucial non-farm payroll numbers due on Friday, for clues on the timing of a rate hike.
Investors will be keen to put the bruising quarter behind them and look ahead to the third-quarter earnings season, which begins next week.
Global markets were upbeat after data from China was not as bad as feared. While factory activity in China shrank again in September, some investors said the government could be more aggressive in its measures to boost the health of the world's second-largest economy.
"Yesterday's sell-up was in a vacuum. There is still a sell bias and the unrest around Syria and Russia are also weighing," said Andrew Frankel, co-president of brokerage firm Stuart Frankel & Co in New York.
General Motors, Ford Motor and Fiat Chrysler were up slightly after they reported a jump in September sales on Thursday.
At 11:09 a.m. ET (1509 GMT), the Dow Jones industrial average was down 95.64 points, or 0.59 percent, at 16,189.06, the S&P 500 was down 5.93 points, or 0.31 percent, at 1,914.1 and the Nasdaq composite was down 26.18 points, or 0.57 percent, at 4,593.98.
Eight of the 10 major S&P sectors were lower, with the utilities index's 1.33 percent fall leading the decliners.
San Francisco Fed Reserve President John Williams is scheduled to speak on the economic outlook at 2:30 p.m. in Utah.
Shares of Twitter were down 5.9 percent at $25.33, a day after on a report that co-founder and interim Chief Executive Jack Dorsey is expected to be named permanent CEO.
Dunkin Brands sank 10.3 percent to $43.96 after company gave weak full-year forecast and said it would shut 100 stores.
Declining issues outnumbered advancing ones on the NYSE by 1,459 to 1,450. On the Nasdaq, 1,550 issues fell and 1,011 advanced.
The S&P 500 index showed four new 52-week highs and 13 new lows, while the Nasdaq recorded 11 new highs and 82 new lows. (Reporting by Abhiram Nandakumar and Tanya Agrawal in Bengaluru; Editing by Saumyadeb Chakrabarty)