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* Peloton tumbles after report co is pausing production

* Travelers up after reporting record quarterly profit (Updates with close of U.S. market)

Jan 20 (Reuters) - Wall Street's main indexes fell on Thursday and a rally in U.S. stocks faded late in the session as investors debated whether equities were becoming bargains after a sell-off to start the year that has seen the Nasdaq fall into correction territory.

Major U.S. indexes had been up sharply for much of the day after a steep drop to start the week. The Nasdaq on Wednesday closed 10.7% below its November all-time high, confirming it was in a correction.

“There seems to be a whole lack of conviction," said Randy Frederick, vice president of trading and derivatives for Charles Schwab. "The dip-buyers step in, but then they run out of momentum.”

According to preliminary data, the S&P 500 lost 50.40 points, or 1.11%, to end at 4,482.36 points, while the Nasdaq Composite lost 185.31 points, or 1.30%, to 14,154.94. The Dow Jones Industrial Average fell 315.30 points, or 0.91%, to 34,709.00.

Putting a damper on growth stocks, shares of Peloton Interactive https://www.reuters.com/business/retail-consumer/peloton-pause-production-bikes-treadmills-demand-wanes-cnbc-2022-01-20 tumbled after CNBC reported that the exercise bike maker is pausing production of its connected fitness products as demand wanes and the company looks to control costs. Peloton was one of the mainstays of the stay-at-home trade in 2020.

Stocks have gotten off to a rocky start in 2022, as a fast rise in Treasury yields amid concerns the Federal Reserve will become aggressive in controlling inflation has particularly hit tech and growth shares.

Treasury yields were relatively steady on Thursday, after dropping from two-year highs on Wednesday.

“Just the fact that they have not gone any higher... at least for the day it's a welcome reprieve from the steady march higher that we have experienced,” said David Joy, chief market strategist at Ameriprise Financial.

Investors are also turning to fourth-quarter earnings reports as they start to roll in.

Shares of Travelers Cos https://www.reuters.com/business/finance/us-insurer-travelers-posts-record-profit-investment-returns-2022-01-20 rose after the property and casualty insurer reported a record quarterly profit.

Data on Thursday showed the number of Americans filing new claims for unemployment https://www.reuters.com/world/us/us-weekly-jobless-claims-increase-amid-omicron-surge-2022-01-20 benefits unexpectedly rose last week, likely as a winter wave of COVID-19 infections disrupted business activity.

(Reporting by Lewis Krauskopf in New York, Bansari Mayur Kamdar and Shreyashi Sanyal in Bengaluru; Editing by Aditya Soni and Lisa Shumaker)