Updated from 4:11 p.m. EDT

Stocks endured sizable swings Friday, surging early amid hopes for a pause in rate hikes, but an afternoon reversal left the major averages slightly lower at the close.

The

Dow Jones Industrial Average

ended the day with a loss of 2.24 points, or 0.02%, to 11,240.35, and the

S&P 500

slipped 0.91 point, or 0.07%, to 1279.36. The

Nasdaq Composite

moved in a 50-point range before finishing lower by 7.28 points, or 0.35%, to 2085.05.

For the week, the Dow gained 20 points, or 0.2%, and the S&P 500 tacked on a point, or 0.1%. The Nasdaq gave back 9 points, or 0.4%, over the five sessions.

JPMorgan Chase

(JPM) - Get Report

and

McDonald's

(MCD) - Get Report

were the biggest Dow losers, each declining 1.2%.

Meanwhile,

Apple

(AAPL) - Get Report

said its internal review of its past options grants has found evidence of additional irregularities, and the computer maker now believes it will probably have to restate some of its past results. Shares of Apple lost $1.29, or 1.9%, to $68.30, pressuring the Nasdaq.

About 1.72 billion shares changed hands on the

New York Stock Exchange

, with advancers beating decliners by a 9-to-7 margin. Volume on the Nasdaq was 1.88 billion shares, and falling stocks outpaced rising issues 3 to 2.

The day's biggest story came from the Labor Department, which said that the economy added 113,000 jobs in July while the unemployment rate rose to 4.8% from 4.6%. Economists had anticipated a gain of about 144,000 jobs, according to a

Bloomberg

survey. Average hourly earnings, a key inflation metric, rose a higher-than-expected 0.4%.

As usual, the employment numbers provided crucial insight into the pace of growth in the U.S. economy and, in turn, the future of the

Federal Reserve's interest rate policy. Before the jobs report, analysts were struggling to reach a consensus opinion as to whether the Fed would raise rates to 5.5% or leave them at 5.25%.

That's changed now. After the report, the futures market was pricing in 18% odds of a rate increase at the Fed meeting, down from around 40% before the data were released.

Ken Tower, chief market strategist with CyberTrader, said the report was bullish for stocks "at least until it occurred to investors that slower-than-expected economic growth will translate into slower-than-expected profit growth. I am highly skeptical of the staying power for any rally."

To view Gregg Greenberg's video take on today's market, click here

.

"We've now seen a consecutive string of low jobs numbers, which shows economic growth is, indeed, slowing," said Barry Hyman, an equity market strategist with EKN Financial. "The slowing job growth shows the dilemma of the Fed."

The Fed has hiked rates at 17 straight meetings going back to June 2004. During that time, the fed funds target rate has climbed 425 basis points from 1%.

Bonds moved higher, with the 10-year Treasury yield dropping to 4.90% from 4.96% before the report. The dollar fell sharply against the yen and the euro.

"There was a spike in the unemployment rate, which in particular helped people switch to the belief the Fed will be on hold," said John Canavan, market analyst with Stone & McCarthy Research Associates. "The yield curve is still inverted but flattening, but the decline in the yield is telling us much about the economy. The economy will remain slow enough to keep the inflation picture in check."

Oil retreated as Tropical Storm Chris continued to weaken in the Caribbean. The storm is now considered not to be a hurricane threat, and has been downgraded to a tropical depression. In Nymex floor trading, September crude fell 70 cents to close at $74.76 a barrel.

Among companies in the news.

Hovnanian

(HOV) - Get Report

became the latest homebuilder to offer cautious guidance, saying its third-quarter earnings should be $1.10 to $1.20 a share, down from its prior forecast for a profit of $1.40 to $1.50. For the full year, the company slashed its earnings estimate to a range of $5 to $5.75 a share from its old outlook of $7.20 to $7.40.

Hovnanian dropped 42 cents, or 1.4%, to $29.10, and the Philadelphia Housing Sector Index reversed an early 2% rise to finish unchanged.

Occidental Petroleum

(OXY) - Get Report

said it had second-quarter earnings, on a core basis, of $1.2 billion, or $2.77 a share, up from $799 million, or $1.96 a share, a year ago. Quarterly revenue increased to $4.6 billion from $3.39 billion. Analysts were looking for a profit of $2.79 a share on revenue of $4.48 billion, according to Thomson First Call. Occidental fell $1.70, or 1.6%, to $105.24.

Goodyear

(GT) - Get Report

posted second-quarter earnings of $2 million, or 1 cent a share, plummeting from last year because of charges related to plant closings. Excluding those charges, Goodyear earned 37 cents a share during the quarter, well ahead of the consensus estimate. Goodyear was higher by 72 cents, or 6.5%, to close at $11.79.

MedcoHealth

(MHS)

reported second-quarter adjusted earnings of 65 cents, beating the Thomson First Call average estimate by 4 cents. Medco rose $1.55, or 2.6%, to $60.65.

Markets were mostly higher overseas. London's FTSE 100 gained 0.9% to 5889, and Germany's Xetra DAX was up 1.6% to 5730. Japan's Nikkei added 0.2% to 15,499, but Hong Kong's Hang Seng shed 0.9% to 16,888.