US STOCKS-Wall St drops with banks after shock jobs data
* May nonfarm payrolls up 38,000 vs. est 164,000
* Unemployment rate at 4.7 pct
* S&P financial index falls sharply, led by banks
* Indexes down: Dow 0.48 pct, S&P 0.44 pct, Nasdaq 0.50 pct (Updates to open)
By Tanya Agrawal and Yashaswini Swamynathan
June 3 (Reuters) - U.S. stocks dropped on Friday, led by banks, after much weaker-than-expected jobs data for May pointed to labor market weakness and raised doubts if the economy was healthy enough to absorb an interest rate hike in the coming months.
The Labor Department said nonfarm payrolls increased by only 38,000 last month, the smallest gain since September 2010 and well below economists' forecast of 164,000.
The jobless rate fell three-tenths of a percentage point to 4.7 percent, the lowest since November 2007. The decrease was in part due to a people dropping out of the labor force.
"It's a fairly disastrous payroll report," said Gennadiy Goldberg, an interest rate strategist at TD Securities in New York. Continuación...