Blue-chip stocks resumed their slide today as a report of strong U.S. employment solidified Wall Street's belief that the Federal Reserve will raise interest rates later this month.
The Dow Jones industrial average fell 79.79 points to close at 10,714.03, erasing more than half of its 119-point gain on Thursday. The blue-chip index ended a choppy week 58.88 points higher, a gain of 0.55 percent.
Broader stock indicators fell modestly, capping a week of steep losses. The Standard & Poor's 500-stock index fell 13.42, to 1300.29; the Nasdaq composite index fell 17.86, to 2547.97. The Nasdaq is now 11 percent below its record high of 2864.48, reached July 16. Traditionally, Wall Street calls a market drop of 10 percent a correction.
Stocks tumbled after the Labor Department reported that employers added a larger-than-expected 310,000 jobs to their payrolls in July and that average hourly earnings, a key gauge of inflation pressures, rose 3.8 percent from a year ago.
"If the Fed needed fuel to consider raising rates, they have it now with these new numbers," said Alan Ackerman, senior vice president at Fahnestock & Co.
Bond prices fell sharply on the report, with the Treasury's benchmark 30-year bond dropping $16.25 per $1,000 invested. Its yield rose to 6.17 percent, from 6.04 percent late Thursday.
Interest rate concerns hurt financial services stocks, as J.P. Morgan fell 2-9/16, to 122-15/16, and Morgan Stanley Dean Witter dropped 4-9/16, to 82 1/8.
Declining issues outnumbered advancing ones by 2 to 1 on the New York Stock Exchange. Volume totaled 698.9 million shares, down from 859.4 million Thursday.
The NYSE composite index fell 6.35, to 611.04; the American Stock Exchange composite index rose 1.83, to 777.92; and the Russell 2000 index of smaller companies fell 1.71, to 428.04.