US STOCKS-Wall St tumbles on labor market, global growth fears

* Data fuels jitters about labor market

* Construction equipment maker Terex cuts profit forecast

* Fourth day of losses for Nasdaq and S&P 500

* Dow off 2.9 pct, S&P 500 off 2.9 pct, Nasdaq off 2.9 pct (Updates to late afternoon, changes byline)

By Kristina Cooke

NEW YORK, Sept 4 (Reuters) - U.S. stocks sank on Thursday, as more signs of weakness in the labor market and increasingly sluggish growth overseas heightened concerns about the corporate profit outlook.

The market hobbled out of the opening gate after weekly government data showed an unexpected jump in the number of filings for jobless benefits, while a report by ADP Employer Services showed private employers cut 33,000 jobs in August.

The data fueled investor nervousness ahead of the government's key August non-farm payrolls report, and losses cascaded in afternoon trading. Only two of the Dow's 30 components escaped the sell-off.

Construction and mining equipment maker Terex Corp (TEX.N: Quote, Profile, Research, Stock Buzz) compounded the gloom when it cut its 2008 sales and profit forecast, citing weak demand in Western Europe and North America. Its shares tumbled 21 percent to $37.36.

Other top drags included economic bellwethers Caterpillar Inc (CAT.N: Quote, Profile, Research, Stock Buzz) and General Electric (GE.N: Quote, Profile, Research, Stock Buzz).

"It's definitely fear of an economic downturn that's hurting us today," said Jack Ablin, chief investment officer at Harris Private Bank in Chicago. "The economic data and the downbeat forecasts from management don't lend a lot of confidence to the economic revival outlook."

The Dow Jones industrial average .DJI fell 333.25 points, or 2.89 percent, to 11,199.63, while the Standard & Poor's 500 Index .SPX dropped 36.72 points, or 2.88 percent, to 1,238.26. The Nasdaq Composite Index .IXIC was down 68.15 points, or 2.92 percent, at 2,265.58.

A lower close would mark the fourth day of losses for both the Nasdaq and the S&P 500, and would be the worst four-day performance for both indexes in nearly three months.

Adding to market jitters were comments from Bill Gross, the manager of the world's biggest bond fund. In order to stop a sell-off in an array of financial markets, the U.S. government should give the Treasury the right to buy debt and other assets to halt a financial tsunami, said Gross, the manager of Pacific Investment Management Co.

Generally lackluster August retail sales were another headwind for the market, as were concerns that sluggish growth was emerging abroad. The president of the European Central Bank, Jean-Claude Trichet, said euro zone data points to weakening growth at midyear.

"The job market has been just a slow drip of bad news," said John Augustine, chief investment strategist at Fifth Third Asset Management in Cincinnati. "That's better than an open faucet, but it's still bad news for the economy. The stock market is struggling because it's waiting for better labor market news."  Continued...