Following the rally seen in the previous session, stocks moved back to the downside during trading on Friday. The tech-heavy Nasdaq showed a particularly steep drop, tumbling to its lowest closing level in well over a month.

The Nasdaq plunged 295.85 points or 1.9 percent to 15,085.47 and the S&P 500 slid 38.67 points or 0.8 percent to 4,538.43, while the narrower Dow climbed well off its worst levels but still closed down 59.71 points or 0.2 percent at 34,580.08.

The major averages went on a rollercoaster road over the course of the week before finish notably lower. While the Nasdaq plummeted by 2.6 percent, the S&P 500 slumped by 1.2 percent and the Dow fell by 0.9 percent.

The pullback on Wall Street extended the volatility seen throughout the week, with stocks showing wild swings back and forth in reaction to the latest news about the Omicron variant of the coronavirus.

After the first confirmed omicron case in the U.S. earlier in the week, the new variant has now been detected in at least five states.

Traders were also reacting to a closely watched report from the Labor Department showing much weaker than expected U.S. job growth in the month of November.

The report said non-farm payroll employment rose by 210,000 jobs in November after surging by an upwardly revised 546,000 jobs in October.

Economists had expected employment to spike by 550,000 jobs compared to the jump of 531,000 jobs originally reported for the previous month.

Despite the much weaker than expected job growth, the unemployment rate slid to 4.2 percent in November from 4.6 percent in October. Economists had expected the unemployment rate to edge down to 4.5 percent.

With the much bigger than expected decrease, the unemployment rate fell to its lowest level since hitting 3.5 percent in February of 2020.

While the disappointing job growth has raised some concerns about the economic outlook amid the emergence of the Omicron variant, economists do not expect the data to dissuade from the Federal Reserve from accelerating the tapering of its asset purchases.

"'Yes' the jobs report is strong enough for the Fed to announce a likely doubling of the pace of QE asset purchase tapering," said Gregory Daco, Chief U.S. Economist at Oxford Economics.

He added, "The Fed's pivot is aimed at providing hawkish forward guidance while clearing the runway for rate hikes anytime after March 2022."

Meanwhile, a separate report from the Institute for Supply Management showed an unexpected acceleration in the pace of growth in U.S. service sector activity in the month of November.

The ISM said its services PMI rose to a record high 69.1 in November from 66.7 in October, with a reading above 50 indicating growth in the sector. The increase surprised economists, who had expected the index to dip to 65.0.

Software stocks turned in some of the market's worst performances on the day, dragging to the Dow Jones U.S. Software Index down by 2.6 percent to its lowest closing level in well over a month.

DocuSign (DOCU) posted a steep loss after the e-signature company reported fiscal third quarter results that beat expectations but provided disappointing revenue guidance.

Considerable weakness was also visible among banking stocks, as reflected by the 2.5 percent nosedive by the KBW Bank Index.

Biotechnology stocks also saw significant weakness on the day, with the NYSE Arca Biotechnology Index slumping by 1.9 percent to a one-year closing low.

Airline, brokerage and tobacco stocks also showed notable moves to the downside on the day, while utilities and gold stocks moved higher over the course of the session.

(Source:RTT News)