* ISM data show service sector contraction
* ADP data fuels labor market worries
* Factory orders record unexpected rise
* Dow, Nasdaq off 1 pct; S&P off 0.93 pct (Updates to early morning)
By Angela Moon
NEW YORK, Aug 5 (Reuters) - U.S. stocks fell on Wednesday after data showed the economy's service sector contracted in July at a faster pace than June, heightening concerns about the strength of the recovery.
Investor sentiment was also hurt by data showing higher-than-expected private-sector job losses in July, which suggested that the labor market remained persistently weak.
Among top drags, shares of consumer product maker Procter & Gamble Co fell 3.4 percent to $53.57 as investors fretted about the company's sales forecast.
The Institute for Supply Management said its service sector index fell to 46.4 last month from 47.0 in June and was below economists' median forecast for a rise to 48.0.
The service sector, accounting for about 80 percent of economic activity in the United States, includes banks, airlines, hotels and restaurants.
"People are not worried about the economic recovery but the strength of the recovery, and today's data on jobs and service sector came out weaker than expected," said Mark Bronzo, portfolio manager at Security Global Advisors in New York.
"We have been seeing incremental data improve, but what we really want to see to have this market strong is that the job market is getting better."
The Dow Jones industrial average fell 93.86 points, or 1.01 percent, to 9,226.33. The Standard & Poor's 500 Index shed 9.35 points, or 0.93 percent, to 996.30. The Nasdaq Composite Index dipped 20.92 points, or 1.04 percent, to 1,990.39.
The S&P 500 is now up 48.7 percent since hitting a 12-year low on March 9.
The Commerce Department said on Wednesday new orders received by U.S. factories unexpectedly rose in June, advancing for a third-straight month and bolstering hopes the recession-hit economy was starting to turn the corner.