US STOCKS-Weak jobs report weighs on Wall St, bank shares
* Employment report dims prospect of Fed rate hike
* S&P financials post biggest 1-day fall in 2 months
* Stocks pare losses by session's end
* Utilities surge, lead all sectors
* Indexes down: Dow 0.18 pct, S&P 0.29 pct, Nasdaq 0.58 pct (Updates to with close of U.S. market)
By Lewis Krauskopf
NEW YORK, June 3 (Reuters) - Wall Street finished lower on Friday, led down by financial shares, after a surprisingly weak jobs report prompted doubts about the U.S. economy and its ability to sustain a near-term interest rate hike.
The U.S. economy created the fewest number of jobs in more than 5-1/2-years in May as manufacturing and construction employment fell sharply. Nonfarm payrolls increased by only 38,000 jobs last month, well below economists' forecast for an increase of 164,000.
Traders significantly cut bets that the Federal Reserve will raise rates at its meetings in June and July. Such sentiment was reflected in the weakness in the financial sector, which is seen as benefiting in a rising rate environment. Continuación...