US STOCKS-Wall St falls after strong payrolls report
* Feb U.S. payrolls growth tops expectations
* Apple to replace AT&T in Dow industrials
* Indexes off: Dow 1.17 percent, S&P 1.1 percent, Nasdaq 0.88 percent (Updates to afternoon, adds comments)
By Sinead Carew
NEW YORK, March 6 (Reuters) - U.S. stocks retreated on Friday, with the S&P 500 index poised for its second straight weekly drop, as a strong monthly jobs report fueled expectations for an interest rate hike by the Federal Reserve this year, possibly sooner than anticipated.
U.S. nonfarm payrolls rose 295,000 last month, topping estimates for a gain of 240,000, after a downwardly revised 239,000 increase in January. The unemployment rate fell to 5.5 percent from 5.7 percent in January.
Many investors had held off making big bets ahead of the report, which is seen as a good gauge for timing the Fed's first rate hike in years. But relatively light volume on Friday suggested a continued lack of clarity about when the Fed will move, said Andrew Frankel, co-president of Stuart Frankel & Co in New York.
"At least for now people are sitting on their hands trying to get an understanding for further direction," Frankel said. "I see conviction when you see big volume on a move. I think it's still up for debate."
At 12:38PM (1738 GMT) the Dow Jones industrial average was down 212.41 points, or 1.17 percent, to 17,923.31, the S&P 500 had lost 23.14 points, or 1.1 percent, to 2,077.9 and the Nasdaq Composite was off 43.63 points, or 0.88 percent, to 4,939.18. Continuación...