US STOCKS-Dow, S&P end higher on financials, down for week

* U.S. data shows more labor market woes

* Jobless rate jumps to 6.1 percent, nearly 5-year high

* Dow up 0.3 pct, S&P 500 up 0.4 pct, Nasdaq off 0.1 pct (Updates to close)

By Kristina Cooke

NEW YORK, Sept 5 (Reuters) - The broader U.S. stock market ended its worst week since May with modest gains on Friday, as a rally in financial stocks helped the market reverse earlier steep losses after a government report showed further deterioration in the U.S. labor market.

News the unemployment rate jumped to a five-year high added to worries about consumer spending and compounded fears of a worsening global economic slowdown. Those fears had battered stocks all week, leaving the S&P 500 with its worst five-day performance since May.

The Nasdaq lagged the other indexes in Friday's session and had its worst week since January, led lower by big-cap technology shares. Analysts say technology is among sectors most vulnerable to a global slowdown due to its exposure to overseas markets.

But beaten-down financial shares rebounded, helping the Dow and the S&P 500 rise. Lehman Brothers (LEH.N: Quote, Profile, Research, Stock Buzz) rose 6.8 percent to $16.20 after sources familiar with the situation said Blackstone Group LP (BX.N: Quote, Profile, Research, Stock Buzz) and Kohlberg Kravis Roberts & Co [KKR.UL] are each looking to buy parts of Lehman's real estate and asset management units.

"We got the bad news on payrolls and the unemployment rate this morning, but given the fact we were down so much yesterday we're seeing a bit of a reflex rally with investors wanting to take advantages of some of the bargains," said Bucky Hellwig, senior vice president at Morgan Asset Management, in Birmingham, Alabama, adding there was optimism about the potential Lehman Brothers' deal.

The Dow Jones industrial average .DJI rose 32.73 points, or 0.29 percent, to 11,220.96, but ended down 2.8 percent on the week.

The Standard & Poor's 500 Index .SPX climbed 5.48 points, or 0.44 percent, to 1,242.31, ending down 3.2 on the week.

The Nasdaq Composite Index .IXIC, meanwhile, slipped 3.16 points, or 0.14 percent, to 2,255.88, ending the week 4.7 percent lower.

The S&P's subindex of financial shares .GSPF rose 3.2 percent.

On the Nasdaq, Qualcomm shares fell 1.8 percent to $47.67, while Apple declined 0.7 percent to $160.18.

SanDisk (SNDK.O: Quote, Profile, Research, Stock Buzz) shares jumped 31.1 percent to $17.64 after Samsung Electronics Co Ltd (005930.KS: Quote, Profile, Research, Stock Buzz), the world's top maker of memory chips, said it may buy the flash memory maker in a deal that could reshape a struggling industry.

And cigarette company Altria Group Inc (MO.N: Quote, Profile, Research, Stock Buzz) is in advanced talks to buy Skoal and Copenhagen smokeless tobacco maker UST Inc (UST.N: Quote, Profile, Research, Stock Buzz), a source familiar with the discussions told Reuters. UST shares jumped 25.1 percent to $67.55.  Continued...