NEW YORK (CNNMoney.com) -- Stocks inched lower Friday, with the Dow industrials ending its three-day streak of record closes, as investors considered a weak September jobs report and a setback for General Motors.

The Dow (down 16.48 to 11,850.21, Charts) lost 0.1 percent, with GM its biggest decliner.

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On Thursday, the blue-chip leader managed a third straight record close, ending at 11,866.69 and briefly touching a trading high of 11,870.06.

The S&P 500 (down 3.64 to 1,349.58, Charts) index fell 0.3 percent, after ending the previous session at its highest point since February 2001. The tech-fueled Nasdaq composite (down 6.35 to 2,299.99, Charts) was also down around 0.3 percent.

"I think the market was maybe looking for an excuse to go down a bit and the payrolls report provided it," said Donald Selkin, director of research at Joseph Stevens.

However, he added that the decline Friday was pretty modest, considering the extent of the rally this week.

On Tuesday, the Dow first knocked out its old record from January 2000, and the blue-chip index has built on it since then. The other major gauges have participated in the run-up as well.

For the week, the Dow gained 1.5 percent, the S&P 500 gained 1 percent and the Nasdaq composite gained 1.8 percent.

While stocks could be at risk to drift or possible decline a bit in the short term, Selkin said that the market will ultimately push higher through the end of the year.

The nearly four-year-old bull market stumbled in May and June, but found some new strength later in the summer as oil and gas prices started falling and the Federal Reserve opted to pause its more than two-year-old interest-rate-hiking campaign.

Investors seem to believe that the fall in oil prices will bring down inflation pressure and that the economy is set to slow but not enter a recession. They also seem to be betting that the Fed is likely to start cutting rates as early as the first quarter of next year.

To an extent, the morning's mixed jobs report and subsequent bond market reaction seemed to counteract such bets, suggesting that the Fed may not be able to cut rates as soon as the first quarter.

But even that prospect failed to rattle markets much, with stocks closing barely lower.

General Motors (down $2.08 to $31.05, Charts) was the Dow's biggest decliner, falling 6.3 percent after Jerry York, who advises Kirk Kerkorian, GM's biggest individual shareholder, quit the automaker's board, citing concerns about the company's ability to compete.

A regulatory filing showed that Kerkorian won't go through with his plan to add to his holdings of GM shares, due partly to the company's decision to end talks with Nissan and Renault about an alliance. (Full story.)

Next week brings the start of the third-quarter earnings, with a small handful of companies due to report results. Dow components Alcoa (up $0.17 to $27.74, Charts) and General Electric (down $0.15 to $36.14, Charts) are due to release results. Other well-known companies reporting include Genentech (down $0.15 to $36.14, Charts) and PepsiCo (down $0.36 to $64.42, Charts).

Analysts are expecting the S&P 500 to post a 13th consecutive quarter of earnings growth of at least 10 percent.

Employers added 51,000 jobs to their payrolls in September, according to a report released Friday morning. That was short of expectations for employers to add 120,000. However, the previous month was revised higher, tempering the blow. In addition, average hourly earnings, the report's inflation component, rose a less than expected 0.2 percent in the month.

The unemployment rate, generated by a separate survey, dropped to 4.6 percent in September from 4.7 percent in the previous month, surprising economists who thought it would hold steady.

Beyond the jarring 51,000 payrolls number, the underlying report paints a fairly bullish take on employment, said Joshua Shapiro, chief economist at Maria Fiorini Ramirez Inc.

That may have been a bit disappointing to stock and bond investors, in that if employment is in fact holding up well, the Fed will be less likely to start cutting rates early next year.

"I think the bond market today is showing a lessened probability of early Fed easing," he added.

Treasury prices tumbled following the report, with investors also taking profits off the recently buoyant bond market. The decline boosted the yield on the 10-year note to 4.69 percent from 4.60 percent late Thursday. Bond prices and yields move in opposite directions.

The Treasury market closed early for the Columbus Day holiday and will be closed Monday.

U.S. light crude oil for November delivery fell 27 cents to settle at $59.76 a barrel on the New York Mercantile Exchange.

COMEX gold for December delivery added $1.30 to settle at $576.80 per ounce after sliding in the morning.

Chipmaker Micron Technology (down $2.40 to $15.14, Charts) slumped 13.7 percent in active trade after it reported quarterly earnings and revenue late Thursday that rose from a year earlier but missed analysts' estimates.

A number of chip stocks slipped in response, with the Philadelphia Semiconductor (down 4.09 to 451.32, Charts) index down about 0.9 percent.

Grocery chains Walgreen (down $0.73 to $42.66, Charts), Rite Aid (down $0.25 to $4.62, Charts) and CVS (down $1.61 to $29.32, Charts) all sank one day after Wal-Mart Stores (down $0.09 to $48.32, Charts) said it will roll out its discount generic drug program four months ahead of schedule.

Google (up $8.69 to $420.50, Charts) shares rose 2 percent after the Wall Street Journal reported that it is in talks to buy web video network YouTube for nearly $1.6 billion.

On the upside, shares of Chattem (up $9.77 to $44.20, Charts), a consumer products maker, surged 28.4 percent in unusually active Nasdaq trade. The company said it is buying five brands from Johnson & Johnson (Charts) and Pfizer (Charts) for about $410 million. The larger companies are selling these brands because of regulatory requirements related to J&J's purchase of Pfizer's consumer health care business.

Market breadth was negative. On the New York Stock Exchange, losers beat winners five to three on volume of 1.57 billion shares. On the Nasdaq, decliners edged out advancers by four to three on volume of almost 1.7 billion shares.

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