Stocks posted modest losses Friday after a disappointing monthly jobs report brought fresh concerns that a recovery in the troubled US labor market may be a long way off.
The Dow Jones industrial average fell for a fourth straight day, losing nearly 22 points a day after tumbling 203 points following weak reports on manufacturing and weekly claims for jobless benefits.
The latest poor report came from the Labor Department, which said American employers cut 263,000 jobs last month. That was more than the 201,000 cut in August and worse than the 180,000 economists were expecting. The unemployment rate rose to 9.8 percent, in line with forecasts.
Meanwhile, a surprise drop in factory orders extended the recent string of disappointing economic readings. The US Commerce Department said factory orders fell 0.8% in August following a 1.4% gain in July. Analysts had been expecting a 0.7% increase.
The market's optimism has been tested this week by a number of economic indicators that have either weakened or fallen short of expectations, a disappointment after several months of hopeful signs on key industries like housing and manufacturing. That has led investors to question whether the 50% surge in stocks over the past six months can be sustained.
With nerves running high, stocks have fallen in seven of the last eight days. The Dow Jones industrials have pulled back about 4.3% since coming within 82 points of the 10,000 level last week.
The Dow fell 21.61, or 0.2%, to 9,487.67, after falling as much as 79 points. The Standard & Poor's 500 index fell 4.64, or 0.5%, to 1,025.21, and the Nasdaq composite index fell 9.37, or 0.5%, to 2,048.11.
For the week, the Dow and the S&P 500 index each lost 1.8%, while the Nasdaq fell 2%.
Stocks are coming off a banner third quarter. Both the Dow and the S&P 500 index gained 15% in the July-September period. It was the Dow's best quarter since 1998.
The market will get reports on the service sector, retail sales and wholesale trade inventories this week.
Germany's DAX closed down 1.6% at 5,467.9, Britain's FTSE 100 lost 1.2% to 4,988.70 and France's CAC-40 was 1.9% lower at 3,649.9.
Shares in British Airways were down 3.6% after EU regulators said expansion plans at its Oneworld alliance - with American Airlines and Iberia - would break antitrust rules on trans-Atlantic routes.
Japan's Nikkei 225 average dropped 2.5% to 9,731.87, with shares of carmakers like Toyota and Nissan especially hard hit. Hong Kong's Hang Seng lost 2.8% to 20,375.49 after being closed Thursday for a national holiday.
Taiwan's index shed 1.8%, Australia's market lost 2.1%, and Indonesia's benchmark was down 0.2%.
South Korea's market was closed for a holiday as were those in mainland China and India.
The 16-nation euro rose to $1.4588 in late New York trading from $1.4537 it bought late Thursday after the head of the labor agency in Germany, Europe's largest economy, said an expected rise in the country's unemployment won't be as steep as originally feared, and the number of people out of work will stay below 5 million next year.
Also in Europe, the number of people seeking unemployment benefits in Spain rose by 80,367 in September, the Labor Ministry said. Jobless claims increased by 1.08 million over the past 12 months for a total of 3.7 million.
Meanwhile, the British pound fell to $1.5919 from $1.5950 after a major mortgage lender said UK house prices rose 0.9% in September, bringing them broadly into line with year-ago levels. It warned, however, that a tight credit market, rising unemployment and an impending increase in tax may bring an end to the recent series of price increases.
The dollar was slightly lower at 89.63 Japanese yen compared with 89.74 yen on news Japan's jobless rate fell and household spending climbed in August.
The unemployment rate unexpectedly declined to 5.5% in August after reaching a record 5.7% a month earlier, the government said.
In other late trading Friday, the dollar slipped to 1.0830 Canadian dollars from 1.0841 late Thursday, and fell to 1.0345 Swiss francs from 1.0413 francs.
Gold for December delivery settled up $3.60 to $1,004.30 an ounce, after earlier falling to as low as $987. Prices ended the week up 1.3%.
Oil prices finished slightly lower on the Nymex. Light, sweet crude for November delivery fell 87 cents to $69.95 a barrel, after falling to as low as $68.32 earlier in the day.