Jobs Report Pummels Stocks

Updated from 4:06 p.m. EST

Stocks tumbled Friday after the government's latest jobs report showed that hiring was much slower than anticipated in December, fueling fears of a broad economic slowdown.

The Dow Jones Industrial Average sank 256.54 points, or 1.96%, to 12,800.18, and the S&P 500 lost 35.53 points, or 2.46%, at 1411.63.

The Nasdaq Composite plunged 98.03 points, or 3.77%, at 2504.65, its worst point decline in nearly a year. The tech-heavy index was pressured by hefty losses in tech giants Intel INTC, Apple AAPL, Dell DELL and Oracle ORCL.

"Tech took a huge beating, as there's worry people won't have cash to buy these types of products," said Robert Pavlik, chief investment officer with Oaktree Asset Management. "It's certainly overdone, and tech will do better as the year wears on. For now, this is extreme defensive positioning, which will give tech a challenging start to the year."

Each of the major averages finished the holiday-shortened week with their worst losses in several months. The Dow declined by 4.2% for the week, and the S&P 500 ended down 4.5%. The Nasdaq was the worst performer, sliding 6.4%.

The latest pullback came after the Labor Department reported that 18,000 jobs were added in December, well short of economists' expectation of 70,000. The unemployment rate jumped to 5% from 4.7% in November, surpassing forecasts of 4.8%. Average hourly earnings rose a greater-than-expected 0.4%.