By Ellis Mnyandu

NEW YORK (Reuters) - U.S. stocks fell on Friday to close at their lowest level in 19 months after a report showed that employers unexpectedly shed jobs at the steepest rate in nearly five years, standing as confirmation for many investors that the United States is in recession.

Another bout of troubling news from mortgage companies hammered the market for a second day after Thornburg Mortgage <TMA.N>, a "jumbo" mortgage lender, said it failed to meet creditors' demands for more upfront cash and noted that its survival is at stake.

Before the opening bell, Wall Street got a shock when the Labor Department reported that 63,000 nonfarm jobs were lost in February -- in contrast to Wall Street economists' forecasts that 25,000 positions would be added -- while the government slashed in half the number of jobs added in December.

The data strongly hinted that U.S. demand for oil and metals would wane, hurting commodity prices and pulling down shares of energy and mining companies. Exxon Mobil <XOM.N> and Chevron <CVX.N> were among the top drags on both the Dow industrials and the S&P 500, along with aluminum producer Alcoa Inc <AA.N>, whose stock dropped 4.6 percent.

Investors also dumped shares of big industrial companies, including Boeing Co <BA.N>, which slid 3.7 percent.

"The debate about recession has swung heavily in favor of the people that believe we are in one," said Ernie Ankrim, chief investment strategist for Russell Investment Group in Tacoma, Washington.

"We are obviously very close to compelling evidence that the economy will have a negative growth rate, at least for the first quarter. Do I recommend people jump in the stock market here? Only if they have iron stomachs."

The Dow Jones industrial average <.DJI> slid 146.70 points, or 1.22 percent, to end at 11,893.69. The Standard & Poor's 500 Index <.SPX> fell 10.97 points, or 0.84 percent, to 1,293.37 -- its lowest close since August 2006.

The Nasdaq Composite Index <.IXIC> dropped 8.01 points, or 0.36 percent, to close at 2,212.49.

For the week, the Dow finished down 3.04 percent, the S&P 500 dropped 2.8 percent -- its second straight weekly decline -- and the Nasdaq fell 2.6 percent -- its third straight weekly loss.

At Friday's close, the S&P 500 was off 17 percent from its record closing high set back in October, a drop that puts the benchmark index just a breath away from crossing a threshold that market technicians consider to be the onset of a bear market.

Exxon Mobil shares dropped 2.4 percent to $82.49, while Chevron shares slid 2.9 percent to $85.26. Alcoa shares lost 4.6 percent to $36.60, while those of Freeport McMoRan Copper & Gold Inc <FCX.N> shed 4.3 percent to $99.88.

Among big manufacturers, shares of plane maker and defense contractor Boeing Co <BA.N> declined 3.7 percent to $76.60 on the NYSE, while those of General Electric Co <GE.N> lost 1.9 percent to $32.23. Shares of Caterpillar Inc <CAT.N>, a maker of heavy equipment, shed 1.3 percent to $69.84.

On the Nasdaq, coffee chain operator Starbucks Corp <SBUX.O> ranked among the heaviest weights on the index, sliding 2.8 percent to $17.10.

But a short-covering bounce helped shares of iPod and iPhone maker Apple Inc <AAPL.O> gain 1.1 percent to end at $122.25.

Thornburg Mortgage said it has $610 million of margin calls outstanding as of March 6, which "significantly" exceeds available cash and puts its survival at stake. For details, see Even so, its stock ended up 8.5 percent at $1.79 on the New York Stock Exchange. Earlier in the session, the stock had plunged more than 30 percent.

After the closing bell, though, Thornburg's stock sank 26 percent to $1.31.

(Editing by Jan Paschal)