Stocks tried to push higher Friday as the dollar's retreathelped the market but investors remained worried about the recovery in the wake of some disappointing economic reports.
The CBOE Volatility Index, widely considered the best gauge of fear in the market, ticked back up toward 30 this morning, before falling back to between 28 and 29.
Factory orders fell 0.8 percentin August, snapping four months of gains. Economists had expected the gauge to rise 0.3 percent.
But the market wasn't as bothered by the factory-orders report as it was with the September jobs report.
The Labor Department said the economy shed 263,000 jobs in September and the unemployment rate rose to 9.8 percent. The unemployment rate was as expected but the payrolls drop was much higher than the 180,000 job loss economists surveyed by Reuters had expected.
Investors have grown increasingly wary of the recovery following several disappointing economic numbers recently. More than two-thirds of readers polled by CNBC.com had expected the jobs number to be worse than economists had predicted.
"[E]conomic data rarely move in a consistent pattern ... 0we should not be surprised that there are bumps in the road," Joel Naroff of Naroff Economic Advisors wrote in a note to clients. "Unfortunately, investors want the latest data to always be better than the previous ones and that is unrealistic. Thus, they react wildly."
Naroff and other economists pointed out that a huge chunk of September's job losses came from the government and therefore, private-payroll losses weren't as bad as the headline number would make it seem.
"If, as I suspect, the October numbers turn out to be a lot better, we will all come back to the conclusion that the economy is moving out of the recession but the recovery is likely to be quite sluggish," Naroff said.
Today's slide came after the Dow dropped 203 pointsThursday in the market's worst decline since before the summer rally.
Shares of CIT Group soared following news that the commercial lender is launching a debt-exchange plan in hopes of avoiding a bankruptcy filing.
There was strength speckled throughout the financial sector, with JPMorgan and US Bancorp among the advancers.
Apple rose more than 2 percent after UBS upgraded its rating on the stock to "buy" from "neutral."
A handful of other big-cap techs, including IBM and Intel, were also higher.
Wal-Mart shares ticked higher after Chairman Rob Walton warned that the retailer would ride out what is expected to be a slow US recovery, while its Asian operations should do better.
General Electric and Comcast continued to slide amid speculation about whether Comcast will buy a 51-percent stake in GE's NBC Universal unit, which is the parent of CNBC. GE CEO Jeff Immelt said the company is in ongoing talks for either a partnership or an IPO for the unit.
First Solar, which is replacing Wyeth in the S&P 500, advanced. Wyeth is being bought by Pfizer .
Crude oil futures , which have consistently tracked stock market movement, also tumbled after the US jobs report, trading below $70 a barrel. Gold advanced, trading above $1,000 a troy ounce.