* May payrolls report well short of expectations

* China PMI falls, adding to global growth fears

* Mining stocks rare gainers as gold prices jump

* Dow negative for 2012, S&P finds support

* Indexes down: Dow 1.7 pct, S&P 1.9 pct, Nasdaq 2.2 pct

By Ryan Vlastelica

NEW YORK, June 1 (Reuters) - U.S. stocks plunged on Friday after a troublingly weak jobs report added to fears about a global economic slowdown and sent the Dow into negative territory for the year.

The report was the latest in a string of bearish data, and came alongside signs of slowing in China's economy. The benchmark S&P, hovering around its 200-day moving average, posted its biggest daily decline since December and was on track for its fourth weekly loss of the last five.

The Labor Department said employers created a paltry 69,000 jobs last month, the weakest in a year, while the unemployment rate rose to 8.2 percent. Economists polled by Reuters had expected non-farm payrolls to increase 150,000.

China's economy showed signs of a broadening slowdown as its official purchasing managers' index fell to 50.4 in May from April's 13-month high of 53.3, signaling a deeper-than-forecast deterioration in demand at home and abroad.

"Risks are elevated when you see numbers like this, especially when coupled with weak data from overseas," said Brad Sorensen, director of market and sector analysis at Charles Schwab in Denver. "There's a concern the global economy is slowing."

Data released later in the session was less bleak. U.S. construction spending rose 0.3 percent in April as private residential construction increased at the fastest pace in six months.

The Institute for Supply Management said its index of national factory activity slipped to 53.5 from 54.8 in April, just missing expectations for 53.9, but the new orders gauge improved to its highest level in over a year.

The Dow Jones industrial average was down 212.26 points, or 1.71 percent, at 12,181.19. The Standard & Poor's 500 Index was down 25.16 points, or 1.92 percent, at 1,285.17. The Nasdaq Composite Index was down 60.98 points, or 2.16 percent, at 2,766.36.

The benchmark S&P index moved closer to its 200-day moving average at 1,284.75, a significant technical level which could trigger more selling if breached.

In Europe, Markit's Eurozone Manufacturing Purchasing Managers' Index dropped to 45.1 in May from 45.9 in April.

Investor concern has been rising about the stability of Spain's banking system and the euro zone as a whole, at the same time U.S. data has shown tepid economic growth.

The worries sent the benchmark S&P 500 index down 6.3 percent in May and investors fleeing to safe-haven government securities.

Banking shares dropped on Friday, with JPMorgan Chase & Co down 3.2 percent to $32.10 and Bank of America Corp down 4.1 percent to $7.05. The KBW bank index declined 4.1 percent.

More than four-fifths of stocks traded on both the New York Stock Exchange and the Nasdaq were lower while all 10 S&P sectors fell. Gold prices climbed more than 3 percent, creating one of the few bright spots on Wall Street. Newmont Mining surged 7.7 percent to $50.80 while Freeport-McMoRan Copper & Gold rose 1 percent to $32.37.

Homebuilders were among the weakest of the day, comprising the top three percentage decliners on the S&P 500. Pulte Group Inc plunged 11 percent to $8.34 while D.R. Horton Inc lost 9.2 percent to $15.08 and Lennar Corp was off 8.3 percent at $25.03.