Stocks slid Friday, capping a week of volatility in financial markets.
A slide in oil prices and mixed news on jobs in the U.S. led to a selloff following two days of big gains. Investors were discouraged by weak U.S. wage growth in December, despite another solid month of hiring. Traders also worried that an expected plan to boost Europe's flagging economy would be too timid.
"After improving for two days in a row, risk sentiment retreated somewhat today amid a nonfarm payrolls report where the guts were not as appealing as the surface," David Tulk, an analyst with TD Securities, said in a research note.
The Dow Jones industrial average dropped 170 points, or 0.9 percent, to close at 17,737. The Standard & Poor's 500 index fell 17 points, or 0.8 percent, to 2,045. The Nasdaq composite declined 32 points to 4,704.
U.S. employers added 252,000 jobs in December, slightly more than economists expected. The government said more jobs were added in October and November than it had previously estimated. The unemployment rate dropped to 5.6 percent from 5.8 percent, mostly because workers exited the labor force.
Although hiring was steady in December, wage gains were disappointing. Average hourly earnings undershot forecasts and fell 0.2 percent last month.
Despite the soft wage growth, forecasters stuck to their prediction that the Federal Reserve would start hiking interest rates later this year.
U.S. crude fell 43 cents, or 0.9 percent, to close at $48.36 a barrel in New York. In London, Brent crude fell 91 cents, or 1.8 percent, to $50.06 a barrel. The price of the key commodity has fallen by more than half since June as traders anticipate a glut of supply caused by increased production.
After a long period of relative calm, stock markets have become more volatile as investors grapple with slowing global growth and slumping oil prices. A gauge of investor anxiety, the Chicago Board Options Exchange's volatility index, or VIX, rose 2.4 percent to 17.4 on Friday, up from 12 a month ago.
The Organisation for Economic Cooperation and Development, which represents 34 of the world's largest economies, said Thursday that inflation among its member countries through November had fallen to 1.5 percent. That followed a report the previous day showing that December consumer prices in the eurozone had fallen for the first time in more than five years.
"It's going to be a volatile year, but I think if you remain a long-term investor ... and you push out this volatility and you focus on the trends, I think [the stock market] is going to have a pretty good year," said Robert Pavlik, chief market strategist at Banyan Partners.
All 10 sectors in the S&P 500 fell, and energy stocks were among the biggest losers. The sector is down 3 percent this year compared with a decline of 0.61 percent for the broader market.
In government bond trading, prices rose, a sign that investors are seeking shelter from the rocky equities market. The yield on the benchmark 10-year Treasury fell to 1.97 percent from 2.02 percent on Thursday.
The euro edged up to $1.1834 from $1.1792 the previous day. The dollar fell to 118.58 yen from 119.80 yen.
The price of gold edged up $7.60 to $1,216.10 an ounce, silver rose three cents to $16.42 an ounce and copper fell two cents to $2.75 an ounce.