Santa and his jolly rally are long gone: The Dow logged its worst week since late November, erasing all of last week's gains in a brutal week littered with layoffs and profit warnings, and capped with a surge in unemployment.
The Dow Jones Industrial Average ended down 143.28, or 1.6 percent, to close at 8,599.18.
The blue-chip index bobbed in a sea of red for most of the day following a quick pop at the open amid relief that only half a million jobs were shed from payrolls last month. The market buzz had indicated the number could be as high as a million.
The S&P 500 shed 2.1 percent, while the tech-heavy Nasdaq lost 2.8 percent.
For the week, the Dow shed 4.8 percent, wiping out all of last week's gains. It was the Dow's biggest decline, both in point and percentage terms, since November. The S&P lost 4.5 percent and the Nasdaq fell 3.7 percent.
Financials lost the most this week, falling more than 9 percent, while materials fared the best, losing just 1.2 percent.
The worst performers on the Dow this week were JPMorgan Chase ; Alcoa , which announced plans to lay off more than 15,000 employees; and Wal-Mart , which unexpectedly missed its holiday-sales target and issued a profit warning.
For the year, the Dow is now off 2 percent, while the S&P has shed 1.4 percent and the Nasdaq has lost 0.3 percent.
The jobs numbers weren't as bad as expected this morning but were nonetheless staggering: Employers slashed 524,000 jobs from nonfarm payrollslast month, the Labor Department reported. Prior months were revised to show that an additional 154,000 jobs were lost between October and November than previously thought. That means a total of 1.9 million jobs were lost in the four months through December, and the total for all of 2008 was 2.6 million, the most since 1945.
The unemployment rate jumped to 7.2 percent, the highest in more than 15 years, from a revised 6.8 percent in November.
"Overall, a terrible report," Ian Shepherdson, chief U.S. economist at High Frequency Economics, wrote in a note to clients. "[T]he only possible glimmer of light is that the maximum rate of fall of payrolls is hopefully not far off," he said.