US STOCKS-S&P500 index posts worst fall since April; indexes down for July
* U.S. labor costs post largest gain in more than 5-1/2 years
* Fear over earlier Fed interest rate rise spurs selling
* Investors fret over Argentina default fallout, Russia tensions
* Dow down 1.9 pct, S&P 2 pct, Nasdaq 2.1 pct (Updates close with Dow negative for the year, latest volume)
By Caroline Valetkevitch
NEW YORK, July 31 (Reuters) - The U.S. S&P500 stock index posted its worst daily fall since April and its first monthly drop since January on Thursday, as economic data sparked concern the Federal Reserve could raise interest rates sooner than some have expected.
Data showing that U.S. labor costs recorded their biggest gain in more than 5-1/2 years in the second quarter this year came a day after the Fed upgraded its assessment of the U.S. economy while reiterating it was in no hurry to raise rates.
Problems in overseas economies added to the bearish tone, with Argentina defaulting on its debt for the second time in 12 years.
"If we start to see wages moving higher that's got a be a signal that we are getting closer to the Fed's mandates," said Quincy Krosby, market strategist at Prudential Financial in Newark, New Jersey. Continuación...