Adding to negative sentiment was a jobs report that showed weaker-than-forecast growth in January.
Though the the rate of U.S. jobs growth in January had a silver lining in the form of strong hourly wage growth and a drop in the unemployment rate to 4.9%, the weak headline number dealt a blow to growth-oriented plays like information technology and consumer-oriented shares.
The Nasdaq Composite was particularly hard-hit by declines in the so-called FANGs—Facebook Inc. FB, +0.10% Amazon Inc. AMZN, +0.65% Google parent Alphabet Inc. GOOGL, +0.08% GOOG, -0.10% and Netflix Inc. NFLX, +1.22% —which are all heavily weighted constituents of the index.
Nasdaq COMP, +1.66% dropped 146.41 points, or 3.3%, to close at 4,363.14. It posted a weekly drop of 5.4%, its largest in a month.
The Dow Jones Industrial Average DJIA, +2.00% tumbled 211.61 points, or 1.3%, to 16,204.97. The blue-chips weekly drop of 1.6% was the largest in three weeks.
The S&P 500 SPX, +1.95% skidded 35.43 points, or 1.9%, to 1,880.02. Information technology shares led the index lower, followed by energy and consumer-discretionary stocks. The broad-market benchmark posted a weekly drop of 3.1%, also its largest in about a month.
A persistent decline in oil prices also weighed on stocks. The U.S. crude-oil benchmark CLH6, +10.72% settled 2.6% lower at $30.89 a barrel, stretching its weekly loss to 8.1%.
Analysts and investors appeared to focus on the negative details of the labor report, said Jack Ablin, chief investment officer at BMO Private Bank.
The report “didn’t do anything to put people who are worried about a recession at ease,” said Mike Antonelli, equity sales trader at R.W Baird & Co.
“If your jobs numbers start slipping on top of all the industrial and manufacturing numbers, then all the pieces are coming together,” he said.
U.S. stocks managed to eke out a small gain on Thursday, after tracking fluctuations in crude-oil prices throughout much of the day. The S&P 500 index closed up 0.2%, while the Dow added 0.5%.