Stocks fell on Friday and were on track to record their worst week in two months after jobs data underscored views the recovery is losing steam.
Financials and economically sensitive sectors were the biggest decliners. The S&P 500 financial index <.GSPF> was down 1.4 percent, while consumer discretionary stocks <.GSPD> were down 1.2 percent. Walt Disney Co fell 1.9 percent to $30.88.
Volume was low, with many participants leaving early for the long Fourth of July holiday weekend.
Adding to the weaker tone was a technical move that indicated more selling pressure may be ahead. The S&P 500's 50-day moving average broke below its 200-day moving average, a break known as the death cross.
Non-farm payrolls fell in June for the first time this year, the government data showed. It was the latest in a series of economic reports that pointed to a tepid U.S. recovery.
The jobs data is slightly worse than expected, said Doug Roberts, chief investment strategist at Channel Capital Research in Shrewsbury, New Jersey. It still looks to be pretty anemic.
The Dow Jones industrial average <.DJI> was down 73.52 points, or 0.76 percent, at 9,659.01. The Standard & Poor's 500 Index <.SPX> was down 6.12 points, or 0.60 percent, at 1,021.25. The Nasdaq Composite Index <.IXIC> was down 12.31 points, or 0.59 percent, at 2,089.05.
U.S. pharmaceutical stocks rose after a source familiar with the situation said French drugmaker Sanofi-Aventis was preparing an acquisition of $20 billion or more in the United States. Among advancers, Allergan Inc and Biogen Idec Inc gained. Allergan rose 6 percent to $61.57 and Biogen advanced 4.8 percent at $48.98.
The Labor Department reported non-farm payrolls dropped by 125,000, the largest decline since October and affected by the loss of temporary government census jobs.
The unemployment rate fell to 9.5 percent, the lowest level since July, though this resulted from people leaving the labor force. Private hiring rose 83,000, the department said, up from the previous month.
Recent data pointing to a wilting recovery had spurred talk of a double-dip recession.
According to technical analysts, a death cross occurs when a shorter-term average falls below a longer-term average. The phenomenon last occurred between the 50- and 200-day moving averages in December 2007, soon after the market began a decline that eventually took the S&P 500 to 12-year lows.
(Reporting by Caroline Valetkevitch; Additional reporting by Rodrigo Campos and Angela Moon; Editing by Kenneth Barry)