S&P ends worst week of 2012

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NEW YORK (CNNMoney) -- U.S. stocks sold off Friday, ending the week lower, after a government report showed that employers added fewer-than-expected jobs in April.

Dow Jones industrial average (INDU) lost 168 points, or 1.3%, to end at 13,038. The S&P 500 (SPX) slid 22 points, or 1.6%, to 1,369. The Nasdaq (COMP) fell 68 points, or 2.2%, to finish at 2,956.

The major indexes all ended lower for the week, after posting two consecutive weekly gains. The S&P 500 fell 2.3% over the last five trading days, marking its biggest weekly decline of the year. The Dow lost 1.3% and the Nasdaq fell 3.7%.

The energy sector was under pressure as oil prices fell 4.4% to below $100 a barrel. Exxon (XOM, Fortune 500) and Chevron (CVX, Fortune 500) were among the worst performers on the Dow.

Investors flocked to the bond market amid a broad flight to safety. The yield on the 10-year Treasury note fell sharply to 1.88%.

The April jobs report showed a net gain of 115,000 jobs, far less than the 160,000 forecast by economists surveyed by CNNMoney. However, the report also showed upward revisions to the February and March jobs figures and a drop in the unemployment rate to 8.1%.

"This is the labor equivalent of running in place while along the way, periodically, someone keeps stepping on your foot," said Kevin Giddis, director of fixed-income at Raymond James Morgan Keegan.

Giddis said investors in the stock market are still hoping for more action from the Federal Reserve. In the bond market, he said investors are expecting subdued growth and low inflation.

"What today's numbers have exposed is that there is no quick fix, and traders look to be settling in for a long summer," Giddis said.

Meanwhile, investors were also cautious ahead of key political elections this weekend in Europe.

In France, socialist candidate Francois Hollande is widely expected to defeat president Nicolas Sarkozy. Greek voters will go to the polls to determine which political parties will make up the new governing coalition.

U.S. stocks slipped Thursday, as the encouraging initial claims report competed with a weaker-than-expected reading on the U.S. service sector.

Economy: Before Friday's report, the week had already brought conflicting data on the labor market, with payroll processor ADP reporting that private-sector job growth has slowed, but the Labor Department announced that initial jobless claims declined.

"The pace of job creation over the last few months is well below last year," said Mark Martiak, senior wealth strategist at Premier/First Allied Securities. "The trend is not looking very positive in terms of job creation." (America's Jobs Crisis)

As hiring slows, investors have been anticipating more action from the Federal Reserve. Some investors expect the central bank to launch a third round of bond purchases, a policy known as quantitative easing.

However, the central bank continues to expect modest improvement in the job market this year. Last month, the Fed said it expects the unemployment rate will fall to between 7.8% and 8% by the end of the year.

"I don't see QE3 coming into play," Martiak said. "I think the Fed has done everything they can for now."

The weak job market could prompt the Fed to extend a program called Operation Twist, which is set to wind down soon, according to Steven Ricchiuto who is a chief economist at Mizuho USA.

Under Operation Twist, the central bank has been using the proceeds from assets in its portfolio to buy longer-term Treasury debt. The goal is to pump money into the economy without expanding the Fed's balance sheet.

Companies: After the market closed, Warren Buffett's Berkshire Hathaway (BRKA, Fortune 500) reported first-quarter net income of $3.2 billion, up from $1.5 billion in the same period a year ago.

Facebook set a price range Thursday of $28 to $35 per share for its initial public offering. The company also upped the maximum size of its offering to $13.6 billion, up from its previous $5 billion estimate.

First Solar (FSLR) shares fell after the company reported a steep quarterly loss late Thursday related to restructuring and announced a new CEO.

AIG (AIG, Fortune 500) shares fell despite earnings that came in well ahead of analyst expectations late Thursday.

Chesapeake Energy (CHK, Fortune 500) shares rose after the company confirmed that it's facing an inquiry from the Securities and Exchange Commission in the wake of revelations about CEO Aubrey McClendon's controversial compensation program.

LinkedIn (LNKD) shares jumped after the social media company reported strong earnings and revenue that doubled versus last year.

World markets: European markets ended lower. Britain's FTSE 100 (UKX) lost 1.9%, France's CAC 40 (CAC40) sank 1.8% and the DAX (DAX) in Germany dropped 2%.

Asian markets finished mixed. The Shanghai Composite (SHCOMP) edged up 0.5%, while the Hang Seng (HSI) in Hong Kong fell about 1.1%. Tokyo was closed for a holiday.

Currencies and commodities: The dollar was slightly stronger against the euro, the British pound and the Japanese yen.

Oil for June delivery fell $4.05 to settle at $98.56 a barrel.

Gold futures for June delivery rose $10.40 to end at $1,645.20 an ounce.

Bonds: The price on the benchmark 10-year U.S. Treasury rose following the jobs report, while the yield fell to 1.88% from 1.92% late Thursday.

Are you worried about how the 2012 presidential election will impact your investment portfolio? Which candidate do you think will be better for the stock market? E-mail Hibah.Yousuf@turner.com for the chance to be included in an upcoming story.