Stocks dropped on Friday after a weak rise in non-farm payroll jobs in June -- the second month in a row -- dashed hopes the economy was emerging from a temporary soft patch and headed for a rebound.

U.S. employers hired a mere 18,000 workers, the Labor Department said, the fewest number in nine months and far below economists' expectations for a 90,000 rise.

The unemployment rate rose unexpectedly to 9.2 percent, the highest since December, from 9.1 percent in May.

Many economists had raised their non-farm payrolls forecasts on Thursday after a stronger-than-expected reading on private hiring from payrolls processor ADP, which prompted stocks to rally on Thursday.

Very disappointing and more from a positioning standpoint where some shorts had thrown in the towel over the last several days and especially yesterday, said Michael Marrale, managing director and head of sales trading at RBC Capital Markets in New York.

I would expect them to re-engage on the back of this number, Marrale said, suggesting further heavy selling.

The Dow Jones industrial average <.DJI> fell 93.62 points, or 0.74 percent, to 12,625.87. The Standard & Poor's 500 Index <.SPX> lost 11.99 points, or 0.89 percent, to 1,341.23. The Nasdaq Composite Index <.IXIC> declined 22.77 points, or 0.79 percent, to 2,849.89.

The benchmark S&P had risen 6.7 percent over the past eight sessions before Friday's decline on economic data which suggested the economy was bouncing back.

The payrolls number means investors will now look toward the start of earnings season next week for guidance.

Clearly one bad month of jobs can be dismissed, two disappointments in a row starts to be a concern. It's putting the pieces in place for very, very low economic growth, said Jack Ablin, chief investment officer at Harris Private Bank in Chicago.

Earnings season can't come soon enough. That will give us a really good handle on our overall trajectory.

U.S. wholesale inventories for May rose 1.8 percent compared with a revised 1.1 percent April gain. Economists had forecast May inventories would rise 0.7 percent from a 0.8 percent increase in April.

Google Inc fell 2.2 percent to $534.34 after Morgan Stanley downgraded the stock.

(Reporting by Chuck Mikolajczak; Editing by Kenneth Barry)

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