What a Week: Stocks Scalded by Oil as Jobs Growth Flops

In conjunction, the yield on the 10-year Treasury note dropped to 4.22% on Friday, the lowest since April and down 25 basis points for the week.

"I think after Tuesday the Fed sits until November," says Richard Yamarone, director of economic research at Argus Research and the man with one of the lowest job-growth projections on Wall Street. "That's when a lot of this uncertainty will dissipate."

Winners and (More) Losers

It wasn't supposed to be this way. Fed Chairman Alan Greenspan spoke reassuringly on July 20 that weakness in jobs, consumer confidence and spending seen in June would be "short-lived." Investors interpreted the words of the Delphic chairman, and some intervening economic data, to mean the swoon was already over.

Wall Street was expecting something more like the March through May jobs reports, when over 200,000 jobs were added a month.

The news was also bad for President George W. Bush, who has been crowing about the growing strength of the economy. Treasury Secretary John Snow was trotted out Friday to reiterate the administration's confidence in a strong recovery.

Over on the University of Iowa's political futures exchange, it's been a different story. The Bush victory in November contract, which pays $1 if he wins and nothing if he loses, has dropped steadily from 60 cents in June to 52 cents on Friday.

Tony Crescenzi, chief bond market strategist at Miller Tabak and RealMoney.com contributor, says uncertainty over the election and terrorism will generate choppiness until November, followed by a "significant snapback" in the economy heading into the holiday season.

The jobs report was so bad, colleague Jim Cramer started tossing around the 'R' word, as in recession.

The change in focus to a gloomier outlook was consistent with the week's sector stock moves. Among those knocked hardest in Friday's maelstrom were basic materials producers.