Stocks ended lower Friday following a dismal government employment report, but still closed higher for the second week ahead of the widely-anticipated earnings season.
The Dow Jones Industrial Average fell 62.29 points, or 0.49 percent, to close at 12,657.20, clawing back from its session lows.
The S&P 500 slipped 9.42 points, or 0.70 percent, to end at 1,343.80.
The tech-heavy Nasdaq declined 12.85 points, or 0.45 percent, to finish at 2,859.81, snapping a eight-day winning streak.
The CBOE Volatility Index, widely considered the best gauge of fear in the market, finished near 16.
For the week, the Dow gained 0.59 percent, the S&P added 0.31 percent, while the Nasdaq rallied 1.49 percent. For the week, Microsoft was the biggest gainer on the blue-chip index while BofA sagged.
Techs were the biggest sector gainers for the week, while telecoms lagged.
Nonfarm payrolls rose only 18,000, according to the Labor Department, well below economists' expectations for a 90,000 rise from a Reuters survey. The unemployment rate climbed to 9.2 percent, the highest since December 2010, from 9.1 percent in May.
Many economists raised their forecasts on Thursday after a stronger-than-expected reading on U.S. private hiring from payrolls processor ADP, and expected gains of anywhere between 125,000 and 175,000.
"This number is horribly disappointing and ridiculously bad!" said Todd Schoenberger, managing director of LandColt Trading. "The monthly jobs figure continues to frustrate Americans and the short-term outlook appears to be dire considering there is no credible plan for job creation presented by the administration."
"Today, risk is off for investors and could very well remain that way into the fall," Schoenberger added. (Read More: 'Horrific' Jobs Report Renews Fears of Double-Dip Recession)
“[The numbers are] certainly disappointing, but it’s not the end of the world,” said Scott Brown, chief economist at Raymond James. “It’s still evidence of a slow patch, but the economic news we had from retail sales and manufacturing suggest that things will improve a bit into the second half.”
Gold prices jumped nearly 1 percentas investors piled into the precious metal as a safe haven. However, oil declined in volatile tradewith U.S. light, sweet crude falling $2.47 to settle at $96.20 a barrel and London Brent crude near $118. The dollar tumbled against a basket of major currencies.
Investors will be looking ahead to second-quarter earnings season, which kicks off next Monday with Alcoa reporting after-the-bell. (How should you trade ahead of the aluminum giant's earnings? Watch the video.)
Bank stocks were the biggest laggards, led by Bank of America after the financial giant reached a deal to sell its Balboa Life Insurance unit to Securian Financial. Rivals Citigroup and JPMorgan are slated to report earnings next week.
On the tech front, Google declined after Morgan Stanley downgraded the Internet giant's rating to "equal-weight" from "overweight" and cut its price target to $600 from $645.
Apple was flat following news that there were security holes discovered in the tech giant's iPhones and iPads. Meanwhile, Canaccord raised its prirce target on the firm to $500 from $485.
Baidu slid after the Chinese search-engine firm
Among retailers, Citigroup cut its price target on Target to $61 from $64 and JCPenney from $45 to $41, but boosted its rating on TJX to "hold" from "sell" and price target to $56 from $46.
Gaming stocks were higher after JPMorgan raised its price targets on Las Vegas Sands , Wynn and MGM Grand .
Caterpillar pared some losses following news that the firm completed its acquisition of Bucyrus International to expand its line of mining equipment.
Volume continued to be light amid the shortened trading week with the consolidated tape of the NYSE at 3.07 billion shares, while 771 million shares changed hands on the floor.
Also on the economic front, U.S. wholesale inventories rose 1.8 percent in Maycompared with a revised 1.1 percent April gain. Economists had forecast May inventories would climb 0.7 percent from a 0.8 percent increase in April, according to a Reuters poll.
And talks to raise the debt ceiling continue after Obama told lawmakers on Thursday he would not sign a short-term extension and said negotiators would work through the weekend on a deal to avoid a debt default, Reuters reported.
On Tap Next Week:
MONDAY: Earnings from Alcoa, Chevron interim results
TUESDAY: International trade, 3-yr note auction, FOMC Minutes, Campbell Soup analyst meeting
WEDNESDAY: Weekly mortgage apps, import & export prices, Bernanke speaks, oil inventories, 10-yr note auction; Earnings from Yum Brands
THURSDAY: PPI, retail sales, jobless claims, business inventories, 30-yr bond auction, money supply, NPD video games sales; Earnings from JPMorgan and Google
FRIDAY: CPI, Empire state mfg survey, industrial production, consumer sentiment, credit card default rates reported, Dell shareholder mtg; Earnings from Citigroup and Mattel
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