The Dow and the S&P 500 fell on Friday after an unexpectedly weak employment report cast doubts on prospects for a quick rebound in the labor market.

But the technology-heavy Nasdaq erased losses, turning positive, helped by biotechnology companies.

The Labor Department said U.S. employers unexpectedly cut 85,000 jobs in December, while economists forecast that payrolls would be unchanged. The government revised November data to show the economy added 4,000 jobs rather than lost 11,000, as initially reported.

It was disappointing, but does not destroy the idea that the economy is on a recovery track. It just makes the recovery look a little bit more gradual, said Pierre Ellis, senior economist at Decision Economics in New York.

The Dow Jones industrial average <.DJI> was down 24.64 points, or 0.23 percent, at 10,582.22. The Standard & Poor's 500 Index <.SPX> was down 1.23 points, or 0.11 percent, at 1,140.46. The Nasdaq Composite Index <.IXIC> was up 4.17 points, or 0.18 percent, at 2,304.22.

James Bullard, president of the St. Louis Federal Reserve Bank, said Friday he would like to see more improvement in the U.S. job market before the Fed exits some stimulus programs.

Financial shares dropped after Citigroup lowered fourth-quarter earnings views on Goldman Sachs Group Inc , Morgan Stanley and JPMorgan Chase & Co , and said it expects lower revenues from their fixed income, currency and commodities segments.

Goldman Sachs was down 0.9 percent at $176.10, Morgan Stanley fell 0.6 percent to $32.73, and JPMorgan Chase dropped 0.4 percent to $44.60.

On the Nasdaq, Genzyme Corp rose 3.8 percent to $53.05 after the biotech company hired industry veteran Ron Branning to take charge of global quality control.

U.S.-traded shares of Teva Pharmaceutical Industries Ltd advanced 2.5 percent to $58.29 a day after the world's largest generic drugmaker set a revenue target for 2015 that is more than double its current annual amount.

United Parcel Service Inc gained 5 percent to $60.25 after the shipping group raised its fourth-quarter outlook and said it will cut 1,800 management and administrative jobs.

(Reporting by Angela Moon; editing by Jeffrey Benkoe)