The S&P 500 broke a four-day string of gains, ending slightly lower on Friday as an unexpected drop in the U.S. unemployment rate was overshadowed by concerns about the coming earnings season, which begins with Alcoa next week.
All three major U.S. stock indexes came off session highs by afternoon trade, with the S&P 500 turning negative for the first time this week, as investors braced for weak corporate results.
The Nasdaq was pressured by Apple Inc , which fell 2.1 percent to close at $652.59.
S&P 500 earnings for the third quarter are forecast to have fallen 2.4 percent from the year-ago period, which would be the first decline in three years, according to Thomson Reuters data.
"It's a bit 'sell-on-the-news' type of a situation. We had the big jobs numbers this morning, but traders and investors don't want to keep their positions going into the weekend and next week," said Chris Bertelsen, chief investment officer of Global Financial Private Capital, a Sarasota, Florida-based wealth manager with $1.5 billion in assets under management.
Despite the lackluster performance for the day, the S&P 500 is still up 16.2 percent so far this year. The benchmark is on track for its best yearly run since 2009 when stocks rebounded after the financial crisis.
"On the negative side, the speed with which the market will get overbought on continued strength may pose a problem," said Ralph Edwards, director of derivatives strategy at ITG in New York.
"The market never had a truly ugly day since the highs registered on September 14th."
Most of the market's gains this year have been prompted by easy monetary policies. The improvement in U.S. hiring last month is one bright spot as manufacturing around the world has been showing signs of softness in recent months.
The Dow Jones industrial average rose 34.79 points, or 0.26 percent, to 13,610.15 at the close. The Standard & Poor's 500 Index dipped just 0.47 of a point, or 0.03 percent, to 1,460.93. The Nasdaq Composite Index slipped 13.27 points, or 0.42 percent, to end at 3,136.19.
For the week, the Dow rose 1.3 percent, the S&P 500 advanced 1.4 percent and the Nasdaq added 0.6 percent.
Dow component Alcoa Inc will kick off the earnings period on Tuesday, when the aluminum company is expected to report that it broke even, compared with earnings of 15 cents a share a year ago. Alcoa's stock edged up 0.2 percent to close at$9.07 on Friday.
Labor Department data showed the U.S. unemployment rate dropped by 0.3 percentage point in September to 7.8 percent, its lowest since January 2009. Investors focused on a survey of households that pointed to a big surge in hiring.
A separate survey of business establishments showed employers added 114,000 jobs to their payrolls last month while data for July and August was revised to show 86,000 more jobs created than previously reported.
Zynga shares plunged 11.9 percent to $2.48 after it slashed its 2012 outlook for a second time, fanning doubts about the games maker's ability to shore up its dwindling earnings.
Facebook , which derives more than a tenth of its revenue from fees paid by Zynga, lost 4.7 percent to $20.91.
Sprint Nextel is considering making a rival bid for MetroPCS Communications , which agreed on Wednesday to a merger with Deutsche Telekom's T-Mobile USA, according to people familiar with the situation.
Sprint Nextel shares rose 2.2 percent to $5.20, while MetroPCS lost 0.3 percent to $12.65.
About 5.7 billion shares changed hands on the New York Stock Exchange, Amex and Nasdaq, compared with the average daily volume of 6.38 billion.
(Editing by Jan Paschal)