NEW YORK (

TheStreet

) -- Stocks settled firmly in negative territory Friday after a dismal May jobs report came in even worse than the market's lowered expectations.

The

Dow Jones Industrial Average

fell 98 points, or 0.8%, to settle at 12,151. The

S&P 500

was lower by 13 points, or 1%, at 1300, and the

Nasdaq

was off by 41 points, or 1.5%, at 2733.

The

U.S. economy added 54,000 jobs in May, which was well below the job growth of 169,000 that economists had been anticipating, according to

Briefing.com

. May's weak growth is a big comedown from April's increase in nonfarm payrolls of 232,000.

The unemployment rate ticked up to 9.1%, disappointing expectations that it would remain unchanged at 9%. Hourly earnings rose 0.3%, which was slightly higher than the uptick of 0.2% that economists had been expecting, and higher than April's increase of 0.1%. The average work week came in at 34.4 hours, which was unchanged from April's upwardly revised level.

"April's jobs number was actually a five-week reporting period, so May's report was set up to be weaker anyway, and we're getting some noise from Japan, the tornadoes and cold, rainy weather than impacted retail sales," said Mark Lamkin, CEO and chief investment strategist at Lamkin Wealth Management, a division of LPL Financial.

"I think we've just hit a soft spot. This is not the start of another recession," he said. "The bottom line is we're still adding jobs. It's not going to be a straight-line recovery."

Nonmanufacturing activity picked up in May, according to the Institute for Supply Management. The ISM's services index rose to 54.6, exceeding the reading of 53.3 that economists had been expecting, according to Briefing.com. May's level compares with April's reading of 52.8.

The FTSE in London added 0.1% and the DAX in Frankfurt ticked up 0.5%. Japan's Nikkei lost 0.7% while Hong Kong's Hang Seng shed 1.3%.

Weakness was widespread across industries. On the Dow,

JPMorgan Chase

(JPM) - Get Report

,

Bank of America

(BAC) - Get Report

and

Wal-Mart

(WMT) - Get Report

traded near the top, while

Walt Disney

(DIS) - Get Report

,

Alcoa

(AA) - Get Report

and

DuPont

(DD) - Get Report

were the biggest laggards.

Of the 760 million shares that traded on the

New York Stock Exchange

, only 22% rose, while 76% declined. On the Nasdaq, 1.70 billion shares traded hands.

Newell Rubbermaid

(NWL) - Get Report

cut its 2011 outlook to a range of $1.60 to $1.67 a share, from $1.67 to $1.70, previously, citing disappointing economic conditions and weak consumer spending trends in the U.S. The stock dropped 11.8% to $14.97.

Shares of

GT Solar International

(SOLR)

soared 12.5% to $13.53 after it

received a $460.4 million order for its advanced sapphire crystallization furnaces from a China-based manufacturing company new to the LED industry.

Electric vehicle maker

Tesla

(TSLA) - Get Report

saw its stock gain 4.7% to $30.13 after

raising $152.4 million in a secondary offering .

The Treasury Department agreed to sell its 6% stake in

Chrysler

to Italian automaker

Fiat

for $500 million. The

deal would bump Fiat's stake in Chrysler up to 52%, making it the largest shareholder.

The July crude oil contract was shed 18 cents to end at $100.22 a barrel. Gold for August delivery rose $9.70 to close at $1,541.70 an ounce.

The benchmark 10-year Treasury rose 10/32, diluting the yield to 2.995%. The dollar weakened slightly against a basket of currencies, with the dollar index down by 0.8%.

.

-- Written by Melinda Peer and Andrea Tse in New York

.

Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.