A wave of late selling pummeled U.S. stocks Friday and pushed the market to its worst week in four years.
The dismal start to the year comes as investors worry that China's huge economy is slowing. That has helped send the price of oil plunging to its lowest level since 2004, the latest blow to U.S. energy companies.
Industrial and technology companies such as Boeing and Apple that do a lot of business in China also have fallen sharply this week. And mining companies such as Freeport-McMoRan plunged as copper prices fell. China is a major importer of copper.
Stocks started the day higher, driven in part by news of an encouraging burst in hiring last month by U.S. employers. China's stock market also rose 2%, recovering somewhat after steep drops earlier in the week triggered trading halts.
Indexes wavered between small gains and losses for most of the day, but they took a decisive turn lower in the last hour of trading. That made this the worst week since September 2011, when the market was roiled by the fight over the U.S. debt ceiling and Standard & Poor's move to cut the credit rating of the U.S. government.
The Dow Jones industrial average dropped 167.65 points, or 1%, to 16,346.45. The Standard & Poor's 500 index fell 21.06 points, or 1.1%, to 1,922.03. The Nasdaq composite index sank 45.80 points, or 1%, to 4,643.63.
The Dow and S&P 500 are each down about 6% for the week. The Nasdaq composite fell even more, 7.3%. That index is heavily weighted with technology and biotech companies, both of which were high fliers last year.
Financial stocks suffered Friday's largest losses. JPMorgan Chase slid $1.35, or 2.2%, to $58.92, and Citigroup fell $1.43, or 3%, to $46.13. Healthcare stocks slumped, led by drug companies. Energy stocks also skidded as the price of oil, already at decade lows, continued to fall.
European stocks also rose early in the day but couldn't hang on to gains. The FTSE 100 index of leading British shares declined 0.7%, while Germany's DAX lost 1.3%. The CAC-40 in France slid 1.6%.
The same pattern held in the U.S. In its monthly jobs report, released before the stock market opened, the Labor Department said U.S. employers added 292,000 jobs in December, far more than economists had forecast.
That's the latest sign the U.S. economy is still growing. On average, employers added 284,000 jobs a month in the fourth quarter, the best rate in a year.
Michael Fredericks, portfolio manager for BlackRock Multi-Asset Income Fund, said the labor market is healthy and wages could improve this month. "These are unusually strong job creation numbers," he said.
Fredericks said the low wage growth and limited inflation would make the Federal Reserve proceed cautiously as it raises interest rates. In December, the Fed raised rates for the first time in nine years, but interest rates are still very low.
Throughout the week, worries about China's economy and shocks to its markets have canceled out positive news from the U.S. and Europe. Although China's economy is still growing, that growth isn't as fast as it had been. That could hurt sales of everything from iPhones to oil and heavy machinery.
Oil prices also lost ground. U.S. crude fell 11 cents to close at $33.16 a barrel in New York, and Brent crude, a benchmark for international oils, declined 20 cents to $33.55 a barrel in London.
Exxon Mobil sank $1.54, or 2%, to $74.69, and Tesoro fell $5.41, or 5%, to $101.62.
Retailers started disclosing their holiday-season results this week. Gap and American Eagle both reported disappointing sales. Gap stock dropped $3.83, or 14.3%, to $22.91, its lowest in almost four years. American Eagle tumbled $2.64, or 16.6%, to $13.24.
Department stores were among the biggest losers on the S&P 500. Their holiday sales have been hurt by the unusually warm winter weather. Kohl's fell $2.98, or 5.9%, to $47.88, and Macy's slid $1, or 2.7%, to $35.89.
The Container Store reported a surprise third-quarter loss and disappointing sales, and its stock plunged $2.96, or 41.2%, to $4.22. The company went public in November 2013 with an IPO that priced it at $18 per share, and it finished its first trading day at $36.20.
The price of gold fell $9.90, or 0.9%, to $1,097.90 an ounce. Silver declined 42.6 cents, or 3%, to $13.918 an ounce. Copper was unchanged at $2.022 a pound.
The euro fell to $1.0903 from $1.0927, and the dollar edged up to 117.67 yen from 117.50 yen late Thursday. Bond prices rose. The yield on the 10-year Treasury note edged down to 2.12% from 2.15%.