* S&P 500 on track for weekly loss
* U.S. July payrolls below forecasts
* P&G, Tesla rise after results
* Indexes down: Dow 0.2 pct, S&P 0.1, Nasdaq 0.4 pct (Updates to late afternoon)
By Caroline Valetkevitch
NEW YORK, Aug 1 (Reuters) - U.S. stocks edged lower on Friday as jobs data suggesting the Federal Reserve has room to keep interest rates low for a while was offset by lingering concern over Argentina's default.
The S&P 500 was on track to post its biggest weekly loss since April.
Government data showed U.S. job growth slowed in July and the unemployment rate unexpectedly rose.
That relieved some investors who were worried about how soon the Fed could bump up interest rates after data on Thursday showed U.S. labor costs recorded their biggest gain in more than 5 1/2 years in the second quarter.
Concern remained over Argentina's debt problems. A U.S. judge on Friday criticized Argentina's decision to default earlier this week, and ordered negotiations between the country and holdout investors to continue.
"Anytime a country defaults on its debt, it's usually an unnerving event in the market," said Natalie Trunow, chief investment officer of equities at Calvert Investment Management in Bethesda, Maryland. "People sell risky assets."
Earnings helped provide some support for the market.
Shares of Procter & Gamble Co, the world's largest maker of household products, rose 3.7 percent to $80.16 after its profit beat expectations.
The stock provided the biggest boost to both the Dow and the S&P 500.
The Dow Jones industrial average fell 25.99 points or 0.16 percent, to 16,537.31, the S&P 500 lost 1.47 points or 0.08 percent, to 1,929.2 and the Nasdaq Composite dropped 16.38 points or 0.37 percent, to 4,353.39.
Electric car maker Tesla Motors Inc's second-quarter revenue nearly doubled from the prior year, while its adjusted earnings topped expectations. Shares rose 5.8 percent to $236.04.
In other economic data on Friday, an Institute for Supply Management report showed that manufacturing had its fastest expansion in more than three years in July. (Editing by Leslie Adler and Nick Zieminski)