* ADP, ISM reports miss forecasts
* Bank stocks weigh
* Indexes off: Dow 1.3 pct, S&P 1.2 pct, Nasdaq 0.9 pct
* For up-to-the-minute market news see [STXNEWS/US] (Adds ISM, construction spending data)
By Chuck Mikolajczak
NEW YORK, June 1 (Reuters) - U.S. stocks fell on Wednesday as another round of weak economic data cast doubts on the strength of an economic recovery.
The S&P was off more than 1 percent after climbing in the four prior sessions. The gains came even as data showed a decline in growth in the second quarter, a trend supported by Wednesday's private employment and factory activity reports.
U.S. private employers added a scant 38,000 jobs in May, the lowest level since September 2010, according to ADP Employer Services data. For details, see [ID:nN01147563]
The Institute for Supply Management's index of national factory activity fell to 53.5 in May -- its worst since September 2009 -- from 60.4 the month before. [ID:nN01170064]
"There's clearly a debate going on within the market as to how much the slowdown that we're seeing is temporary, related to the situation in Japan and the supply chain disruptions, and how much of it is more fundamental slowing," said Keith Hembre, chief economist at First American Funds in Minneapolis.
"The data flow has been universally negative for the last few weeks ... but it is appropriate to keep in mind that a (reading above 50) is still consistent with moderate growth in manufacturing."
The Dow Jones industrial average .DJI dropped 157.57 points, or 1.25 percent, to 12,412.22. The Standard & Poor's 500 Index .SPX slid 16.44 points, or 1.22 percent, to 1,328.76. The Nasdaq Composite Index .IXIC fell 24.17 points, or 0.85 percent, to 2,811.13.
Bank stocks were among the worst performers, with JPMorgan Chase & Co (JPM.N) off nearly 3 percent to $42, and US Bancorp (USB.N) down 2.7 percent to $24.92. The KBW bank index .BKX dropped nearly 3 percent. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
For an analysis on big hedge funds deserting bank stocks,
see [ID:nN31155844] ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
Macy's Inc (M.N) dipped 1.1 percent to $28.55 after the department store operator posted a 7.4 percent increase in May same-store stores, beating expectations. [ID:nN01149481]
Sealed Air Corp (SEE.N) lost 4.8 percent to $24.33 after the bubble wrap maker agreed to buy private cleaning products maker Diversey Holdings for $2.9 billion in cash and stock. [ID:nL3E7H120K]
Marathon Oil Corp (MRO.N) dropped 2.8 percent to $52.71 after the integrated oil company made a deal to acquire oil and gas properties in Texas' Eagle Ford shale field from private equity firm KKR (KKR.N) and Hilcorp Resources Holdings LP for $3.5 billion. [ID:nN01146047] (Reporting by Chuck Mikolajczak; additional reporting by Rodrigo Campos; editing by Jeffrey Benkoe)