Stocks closed near session lows Friday, with all three major averages posting their worst weekly drop this year, as investors were cautious ahead of the weekend amid fears over the euro zone and euphoria over Facebook's trading debut fizzled.
Facebook eked out a tiny gain after fighting to stay in positive territory in the final hour of trading. The stock surged more than 10 percent out of the gate after pricing at $38 a share, becoming the largest Internet IPOin history. (Read More: Was the Facebook Deal Overhyped?)
Over 578 million Facebook shares exchanged hands during the regular trading session, easily surpassing GM's first-day record trading volume of 458 million shares by 3pm ET. Facebook's trading action accounted for almost 22 percent of the Nasdaq's volume today.
The Dow Jones Industrial Average fell 73.11 points, or 0.59 percent, to close at 12,369.38, logging its 12th down day in the last 13 sessions for the first time since October 1974.
The S&P 500 dropped 9.64 points, or 0.74 percent, to end at 1,295.22, slumping below the key 1,300 level for the first time since mid-January. The Nasdaq erased 34.90 points, or 1.24 percent, to finish at 2,779.79.
The CBOE Volatility Index, widely considered the best gauge of fear in the market, closed above 25.
For the week, the Dow tumbled 3.52 percent, the S&P 500 declined 4.30 percent, and the Nasdaq plunged 5.28 percent. JPMorgan was the biggest laggard on the Dow for the week, while Wal-Mart rallied.
All 10 S&P sectors finished in negative territory for the week, led by financials and materials.
"Facebook has a long way to go in terms of creating value," said Manual Henriquez, CEO of Hercules Technology Growth Capital. "Facebook's in a process of monetizing those mobile users, something that hasn't really happened yet in the industry, and it's a revolutionary thing they're about to do so there's a really good future there for the valuation for that company to run further."
However, shares of other social media companies including LinkedIn , Yelp , Zynga and Groupon ended sharply lower.
Meanwhile, Pivotal Research Group initiated coverage of Facebook with a "sell" rating and set a price target of $30 on the stock
Nasdaq shares were dented amid buzz among traders over possible technical issues at the exchange earlier, causing Facebook's trading to be delayed by almost 30-minutes. Nasdaq later confirmed that all systems were back to operating normally and all trading reports have been delivered.