The Standard & Poor's 500 index fell 12.78, or 1 percent, to 1,300.16. The Nasdaq composite fell 40.53, or 1.5 percent, to 2,732.78. Each index lost 2.3 percent for the week.
Despite the market's recent slump, analysts say there are plenty of bright spots, including business spending and bank lending.
Employers added only 54,000 workers in May, the fewest in eight months and well below what analysts were expecting, the Labor Department reported. Private companies hired the fewest new workers in nearly a year. The unemployment rate inched up to 9.1 percent from 9 percent.
Stocks fell sharply early Friday but recovered some ground after a report from the Institute for Supply Management said the service sector grew in May for an 18th straight month. The pace of growth picked up slightly from the ISM report in April, which was the worst in eight months.
Later, European officials said Greece would receive the next installment of its emergency loan package, lifting some uncertainty about its fiscal crisis.
Newell Rubbermaid Inc. shares fell 12 percent after it lowered its outlook for sales and earnings in 2011. Large retailers that sell its products are lowering their expectations for economic growth this year.
"Persistent softness in the U.S. economy and increased inflationary pressure have caused us to revise our outlook for the balance of the year," President and CEO Mark Ketchum said in a statement. "Our revised expectations are lower than they were just a short while ago."