Stocks eased off their worst levels in the final hour of trading, but still finished firmly in the red Friday on the heels of a disappointing June government jobs report.
The Dow and the S&P 500 posted weekly losses, while the Nasdaq managed to eke out a gain for the fifth-consecutive week.
The Dow Jones Industrial Average tumbled 124.20 points, or 0.96 percent, to close at 12,772.47, led by Caterpillar and H-P .
The S&P 500 fell 12.90 points, or 0.94 percent, to end at 1,354.68. The Nasdaq dropped 38.79 points, or 1.30 percent, to finish at 2,937.33.
The CBOE Volatility Index, widely considered the best gauge of fear in the market, ended near 17.
For the week, the Dow shed 0.84 percent, the S&P 500 erased 0.55 percent, while the Nasdaq squeezed out a gain of 0.08 percent. BofA was the biggest laggard on the Dow for the week, while Wal-Mart gained.
Industrials led the weekly key S&P sector decliners, while consumer staples climbed.
"The economic recovery is clearly stuck in quicksand as job creation remains anemic and layoff announcements soar," said Todd Schoenberger, managing principal at The BlackBay Group.
Non-farm payrolls rose by 80,000, according to the Labor Department, missing expectations for a gain of 90,000 jobs, according to a Reuters poll. Meanwhile, the unemployment rate remained unchanged from May at 8.2, in line with predictions. (Read More—Jobs Data Not Recessionary: Hatzius)
With yet another month of weak employment growth, the second quarter marks the weakest three-month period in two years, fueling optimism that the Federal Reserve will step in with additional monetary easing. Recent economic reports have been dismal with the ISM manufacturing index earlier this week indicating a contraction for the first time in nearly three years.
“These numbers are not bad enough to warrant Fed involvement,” said Schoenberger. “You’re not going to get anything from the Fed unless anything catastrophic happens such as a loss on non-farm payrolls or GDP under 1 percent—the Fed is reactive, not proactive.”