* Jobless claims top view, CPI rises faster than forecast
* Fed worried euro zone crisis may affect US banks-report
* Indexes off: Dow 2.8 pct, S&P 3.1 pct, Nasdaq 3.7 pct
* For up-to-the-minute market news see [STXNEWS/US] (Updates to early morning trading, adds byline)
By Rodrigo Campos
NEW YORK, Aug 18 (Reuters) - U.S. stocks tumbled 3 percent in early trading on Thursday, weighed down by bank shares, as a report that regulators were intensifying their review of European banks' U.S. units shook up investors.
The KBW bank index <.BKX> fell 4 percent, with Citigroup
Inc
Concerned the European debt crisis might spread to the U.S. banking sector, the Federal Reserve Bank of New York has asked for more information about whether the U.S. bank units of big European banks have reliable access to funds needed to operate, the Wall Street Journal reported. For details, see [ID:nL5E7JI0Q]
The selloff "is rooted in the European banking system," said Jack de Gan, chief investment officer at Harbor Advisory Corp in Portsmouth, New Hampshire.
"It reflects continued concern that sovereign debt issues indicate we're going to have to bail out all those banks again. And if there's stress in major European banks, it will affect U.S. banks too."
The Dow Jones industrial average <.DJI> was down 313.90 points, or 2.75 percent, at 11,096.31. The Standard & Poor's 500 <.SPX> fell 37.25 points, or 3.12 percent, at 1,156.64. The Nasdaq Composite <.IXIC> dropped 93.43 points, or 3.72 percent, at 2,418.05.
Investors continued to worry that European policymakers were not doing enough to tackle the euro zone's debt crisis. European blue chips <.FTEU3> were down 4 percent, with banks <.SX7P> down 5.5 percent. [.EU] [MKTS/GLOB]
Separate U.S. government reports showed new jobless claims rose more than expected last week, while consumer prices rose faster than expected in July. [ID:nN1E77H0E8]
Data on leading indicators and home resales as well as the Philadelphia Fed's business activity index are due at 10 a.m. EDT. (1400 GMT) (Reporting by Rodrigo Campos; editing by Jeffrey Benkoe)