Stocks fell on Friday, after a report showing surprisingly soft U.S. jobs growth and a disappointing outlook from Intel Corp. (Nasdaq:INTC - news) curbed optimism over the strength of the economic recovery.

Volume tapered off in the afternoon, due to a big snowstorm on the East Coast that blanketed New York City with snow by late afternoon.

Traders attributed the low level of trading to many people leaving work early to get an early start home before the storm worsened. Friday's winter storm is expected to dump as much as 2 feet of snow in parts of New England by Sunday.

"We're digesting the jobs news and the Intel outlook last night," said Owen Fitzpatrick, a managing director at Deutsche Bank Private Wealth Management. "We're seeing a sell-off in tech, but I don't think it's going to last, given the fact we're still ramping up momentum on the positive side."

In the jobs report, the government said U.S. companies hired far fewer workers than expected in November, though jobs were created for the fourth straight month and the unemployment rate fell.

"The jobs data was overall in line, but breaking it down in terms of where there was and wasn't growth, it was disappointing," Fitzpatrick said. "It raises a question mark about the employment picture, but doesn't change the overall trend."

Intel dragged on the technology sector, after the No. 1 semiconductor maker failed to raise the top of its quarterly sales forecast and disclosed a $600 million charge for a poorly performing wireless business late Thursday. The report dashed investors' hopes for an outlook that would show the economy's accelerating recovery is finally feeding into corporate America's profits.

The Dow Jones industrial average ("DJI - news) ended down 68.14 points, or 0.69 percent, at 9,862.68, according to the latest available data. The Standard & Poor's 500 Index ("SPX - news) ended off 8.22 points, or 0.77 percent, at 1,061.50. The technology-laden Nasdaq Composite Index ("IXIC - news) dropped 30.98 points, or 1.57 percent, to 1,937.82.

The major indexes ended the week on a mixed note. The blue-chip Dow rose 0.82 percent, while the S&P 500 gained 0.31 percent. But the Nasdaq fell 1.14 percent.

In bond trading, short-term Treasury yields registered their steepest one-day drop since just after the Sept. 11, 2001, attacks, after the weak jobs report suggested the Federal Reserve would hold interest rates steady at 45-year lows for some time.

Intel was among the Nasdaq's most actively traded stocks. It fell $1.44, or 4.29 percent, to $32.10, and was the blue-chip Dow's biggest percentage loser. Other chip shares followed suit, sending the Philadelphia Stock Exchange's Semiconductor Index ("SOXX - news) down 3.19 percent.

Kmart Holdings Corp. (Nasdaq:KMRT - news) shares tumbled, after it reported a narrower quarterly loss from a year earlier when it was in bankruptcy, but its sales slumped as it cut fewer prices in hopes of turning a profit.

Shares of Kmart, the No. 3 U.S. discount chain, which filed the largest-ever retail bankruptcy in January 2002, fell $1.90 or 6 percent to $29.40.

Department store operator Sears, Roebuck and Co. (NYSE:S - news) fell, after saying its November sales at stores open at least a year fell a worse-than-expected 3.6 percent, due to weak early holiday spending. Sears shares fell $3.63, or 6.9 percent, to $48.96.

The Labor Department said the number of workers on U.S. payrolls outside the farm sector edged up by 57,000 in November -- far below forecasts for a huge increase of 150,000 and sharply lower than October's upwardly revised gain of 137,000 jobs. However, the unemployment rate dipped in November to 5.9 percent, its lowest level since March, from 6.0 percent in October.

News that the U.S. economy had created a mere 57,000 jobs in November sparked a big shift in the two-year note's yield , which sank as low as 1.84 percent in the session from 2.04 percent late Thursday, its biggest one-day drop since the Sept. 11, 2001, attacks on the United States. The two-year note's price, which moves in the opposite direction of its yield, was up 11/32 at 100-1/32 late Friday afternoon, with its yield at 1.86 percent.

The price of the benchmark 10-year Treasury note climbed more than a full point, rising 1-5/32 to 100-7/32 late Friday afternoon, driving its yield down to 4.22 percent from 4.37 percent late Thursday.

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