(Updated from 4:02 p.m. EDT)

Take light volume on a summer Friday mixed with very bad earnings news from the technology sector and poor data about the labor market, and you get a real bummer of a day for the markets.

The

Dow Jones Industrial Average dropped 227 points, or 2.2%, to 10,253, while the

Nasdaq Composite was off 76, or 3.7%, to 2004. The broader market

S&P 500 closed 29 lower, or 2.4%, to 1191.

Stocks were bogged down by 11th-hour warnings issued last night by

Advanced Micro Devices

(AMD) - Get Advanced Micro Devices, Inc. Report

, which forecast a second-quarter earnings

shortfall due to a slowdown in the telecom industry, and

EMC

(EMC)

, which said second-quarter earnings would be significantly

lower than expected as a result of the slowdown in IT spending.

"These warnings

came from a couple of high-profile technology companies," said Todd Clark, head of listed trading at

W.R. Hambrecht

. "And the analyst community was blindsided by weakness in their businesses."

But despite today's dreary session, some stock traders weren't overly pessimistic: "We're dealing with extraordinarily light volume. It's easy to push around a thin market," said Michael Driscoll, director of listed trading at

Credit Suisse First Boston

. "People are comfortable with the fact that earnings are as bad as they will get. And when they come back to work on Monday, they will have a chance to pick up stocks at cheap prices."

Software outfit

BMC Software

(BMC)

also warned, saying it anticipates first-quarter earnings and revenue, excluding charges, to be below analysts' estimates. All together, Wall Street was disappointed: BMC fell 9.1% to $20.68; AMD tumbled 27.4% to $20.80; and EMC slid 28.1% to $21.60, a new 52-week low.

In the EMC fallout,

IBM

(IBM) - Get International Business Machines (IBM) Report

dropped 5% to $106.50 and was the biggest drag on the Dow. Also,

Goldman Sachs

lowered its estimates on IBM.

Computer Associates

(CA) - Get CA, Inc. Report

closed off 5.6% to $32.02.

On the economic front, investors were digesting the latest

jobs report. The

labor market weakened further in June, as

nonfarm payrolls

fell by 114,000. But the

unemployment rate

rose to just 4.5% from 4.4% in May; economists had expected the jobless rate to rise to 4.6%.

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"The bottom line is we're not out of the woods yet," said Ethan Harris, senior economist at

Lehman Brothers

. "But while today's report shows the labor market is still deteriorating, it was no big surprise." Harris thinks the economy is poised to recover this year and notes that the labor market lags growth in the overall economy.

Financial stocks tumbled, with the

American Stock Exchange Broker/Dealer Index

off 3% and the

Philadelphia Stock Exchange/KBW Bank Index

losing 2.2%.

Tacking on Losses

In the past month, the Dow has fallen over 900 points, and more than 8%. (It last closed above 11,000 on June 7.) For the week, it is off approximately 2%. The Nasdaq is behind about 7% and the S&P is off approximately 2%.

Tech stocks were mired in negative territory this morning: AMD rival

Intel

(INTC) - Get Intel Corporation (INTC) Report

was off 4.7% to $28.43. The

Philadelphia Stock Exchange Semiconductor Index

closed 8.6% lower. (

TheStreet.com

took a separate look at the

fallout in the chip sector.)

Cisco

(CSCO) - Get Cisco Systems, Inc. Report

,

Juniper

(JNPR) - Get Juniper Networks, Inc. (JNPR) Report

and

Sun Microsystems

(SUNW) - Get Sunworks, Inc. Report

were among other big-cap tech hard hit.

Among tech stocks to hit new 52-week lows today were Juniper,

Marconi

(MONI)

(which warned earlier this week),

Ciena

(CIEN) - Get Ciena Corporation Report

and

Ericsson

(ERICY)

.

But there was a glimmer of good news for stocks. This morning,

Alcoa

(AA) - Get Alcoa Corp. Report

sounded the starting bell for second-quarter earnings season, and the world's top producer of aluminum beat Wall Street's expectations. It posted earnings of $429 million, or 49 cents per share in the second quarter. Alcoa traded lower, however, off 2.4% to $49.80, down along with other cyclical -- or economically sensitive -- stocks.

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