NEW YORK — A mixed employment report sent the stock market tumbling Friday as investors, fearful about the economy's direction, unloaded technology shares and retreated to the energy and health-care sectors.
Analysts said the sell-off reflected Wall Street's worries that the employment numbers were not weak enough to persuade the Federal Reserve to cut interest rates again before its next scheduled meeting in March.
The Dow Jones industrial average closed down 119.53 to 10,864.10 but still gained 1.9 percent for the week.
The tech-dominated NASDAQ composite index slid 122.29 to 2,660.50, dropping 4.3 percent for the week — its first weekly decline in three weeks. The Standard & Poor's 500 index lost 24.00 to reach 1,349.47, ending the week off 0.4 percent.
"The market is responding to all the negative data we've been getting and saying this economy is very, very weak, and you're likely to have more companies announcing layoffs," said Hugh Johnson, chief investment officer at First Albany Corp. "I keep asking myself what is going to turn this around, and I don't have an answer."
Many investors have been buying in anticipation of future rate cuts, and Friday's downturn reflected their concerns about the Fed's ability to stimulate the economy.
"The concern is not so much with the first quarter, the concern is what the second quarter is going to look like," said Bill Barker, an investment strategy consultant with Dain Rauscher. "That is what is keeping this market off balance."
Technology losses accounted for much of Friday's decline, although some blue chips also suffered.
Intel, a Dow component, slipped $2.13 to $35.69 and Oracle lost $2.31 to $27.75.
The Dow was also pulled lower by declines in banker J.P. Morgan, down $1.21 at $54.64, and 3M, off $2.82 at $108.73.
The market opened to news that unemployment had climbed to 4.2 percent last month, reflecting a slowdown in economic growth that forced thousands of layoffs in autos and other manufacturing industries.
Analysts said the Labor Department report, while indicating continuing weakness, probably would not be troublesome enough to provide a catalyst for a February rate cut. Although the unemployment rate rose, job growth was much stronger than expected — there were nearly 270,000 new jobs last month, compared to the 90,000 analysts expected.
The Fed cut rates twice in January, but its next meeting isn't until the end of March. Most analysts doubt the agency will cut rates before then, unless economic reports are particularly disappointing.
The prospect of lower rates has been encouraging investors to buy, despite lackluster earnings and the strong likelihood that many companies' forecasts won't improve until the second half of the year.
Still, much of the buying has been focused on pharmaceutical and consumer goods issues — considered safer bets in an economic slowdown.
Indeed, Friday's few bright spots were primarily non-technology issues. Energy stocks moved higher, led by Enron, up $1.19 to $79.98, and Schlumberger, which rose $1.49 to $77.
Health care stocks also advanced. Drug company Johnson & Johnson gained $1.23 to $95.10, while health-care provider Aetna climbed $1.08 to $38.58.
Declining issues led advancers 6 to 5 on the New York Stock Exchange. Trading was light with consolidated volume at 1.25 billion shares, compared with 1.33 billion Thursday.
The Russell 2000 index fell 7.44 to 501.50, but ended the week up 0.6 percent.
Overseas, stocks fell. Japan's Nikkei stock average slipped 0.6 percent. Germany's DAX index was lost nearly 1.0 percent, Britain's FT-SE 100 slipped about 0.1 percent, and France's CAC-40 dropped 1.2 percent.