Stocks Eke Out Gains

Treasuries initially sold off after the report before rising. The 10-year note was up 13/32 in price, yielding 4.30%. The 30-year bond climbed 19/32 in price, yielding 4.60%.

On the New York Stock Exchange 4.28 billion shares changed hands, as decliners toppled advancers by a 6-to-5 margin. Volume on the Nasdaq reached 2.47 billion shares, with winners matching losers.

Blue chips finished the week with losses while tech managed a small gain. The Dow fell 1.5% and the S&P 500 slid 1.6%. The Nasdaq was 0.2% higher.

Stocks managed to put a bit of Thursday's drubbing behind them, when the Dow plunged 362.14 points, or 2.6%, to 13,567.87, and the Nasdaq sank 64.29 points, or 2.25%, to 2794.83.

As with the previous session, Citigroup led the financial sector lower with a 2% loss. Merrill Lynch (MER Quote), Goldman Sachs (GS Quote), and Morgan Stanley (MS Quote) all finished lower by 4.4% or more.

"The financials are in a freefall again, as the subprime problem continued to rise to the surface," said Paul Mendelsohn, chief investment strategist with Windham Financial. "You can see through all these ancillary units that there's a flight to safety. Insurance companies are lower. We don't know what the cross-credit risks are yet."

Homebuilders were also suffering. Ryland (RYL Quote), Centex (CTX Quote), Beazer Homes (BZH Quote) and Standard Pacific (SPF Quote) all lost more than 1.5%.