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The price of safe-haven U.S. Treasuries slipped after many investors concluded the jobs report was not as bad as had been feared, leading to a mild bout of profit-taking.
The unemployment rate fell as discouraged American workers dropped out of the labor force, but a modest rise in private employment tempered worries of a double-dip recession.
Earlier in Europe, the price of German Bund futures fell while European shares ended slightly higher as the worst fears about the U.S. economy failed to come true.
"With all the gloom and doom before the report, you could say it wasn't as bad as it could have been, but it's probably not a positive for the economy," said Robert Yawger, senior vice president, energy futures at MF Global in New York.
ON WALL ST, WORST WEEK IN 2 MONTHS
U.S. stocks posted their worst week in two months on the jobs data and a report that showed new orders for U.S. factory products dropped by the sharpest since the depth of the recession and fell for the first time in nine months.
A technical move that suggested more selling pressure may be ahead also weighed on U.S. stocks. The S&P 500's 50-day moving average broke below its 200-day moving average, a development known as the "death cross."
Volume on Friday was among the worst five days of the trading year, with many participants leaving early for the long Fourth of July holiday weekend.
The Dow Jones industrial average closed down 46.05 points, or 0.47 percent, at 9,686.48. The Standard & Poor's 500 Index lost 4.79 points, or 0.47 percent, to 1,022.58. The Nasdaq Composite Index fell 9.57 points, or 0.46 percent, to 2,091.79.
Global shares ended at break-even, however. MSCI's all-country world equity index rose 0.03 percent, while its emerging markets index gained 0.4 percent.
The pan-European FTSEurofirst 300 index of top shares rose 0.1 percent to close at 969.66 points. The index lost 4.3 percent for the week.
"What seems to be happening is that people are a bit less worried now about the idea the U.S. economy is already sliding into a double-dip recession," Julian Jessop, fixed-income strategist at Capital Economics, said about the data.
OIL FALLS, DOLLAR DROPS VS EURO
U.S. crude oil prices fell a fifth straight day to a three-week low on the bearish U.S. economic data.
U.S. crude oil futures slipped 81 cents, or 1.11 percent, to settle at $72.14 a barrel, the weakest close since June 8.
ICE Brent crude oil futures fell 69 cents, or 0.95 percent, to settle at $71.65, the weakest close since May 25.
Gold prices rebounded on technical strength and bargain hunting after double-dip recession fears triggered the biggest losses in six weeks on Thursday.
Gold was supported by a stronger euro against the dollar before the long U.S. Independence Day weekend.
U.S. gold futures for August delivery settled $1 higher at $1,207.70 an ounce, but ended the week nearly 4 percent lower.
U.S. bond prices were mixed. The benchmark 10-year note was down 9/32 in price to yield 2.98 percent. The 2-year U.S. Treasury note was flat at 0.63 percent.
"The uncertain response in bonds suggests the employment report was a difficult read. There's a lot of mixed data in there," said Kim Rupert, managing director of global fixed-income analysis at Action Economics LLC in San Francisco.
The dollar slipped against the euro, extending the previous day's steep losses, on concerns about the U.S. recovery.
The euro rallied sharply against the dollar this week as investors looked past economic problems in the euro zone and focused instead on the possibility of a stalled U.S. recovery.
The jobs report "reinforces the market's view that the U.S. recovery is losing steam," said Greg Salvaggio, vice president of trading at Tempus Consulting in Washington.
The dollar was down against a basket of major currencies, with the U.S. Dollar Index down 0.44 percent at 84.343.
The euro was up 0.19 percent at $1.2541.
Against the yen, the dollar was up 0.22 percent at 87.79.
Earlier in Asia, stocks gave up early gains to trade flat as investors remained nervous ahead of the closely followed U.S. jobs report.
Japan's Nikkei average ended a touch firmer after choppy trade, rising 0.13 percent to close at 9,203.71, just above the key 9,200 support level, while the MSCI index of Asia Pacific stocks outside Japan fell 0.1 percent.
(Reporting by Chuck Mikolajczak, Wanfeng Zhou, Robert Gibbons and Burton Frierson in New York; Ikuko Kurahone in London; Lucia Mutikani in Washington; Writing by Herbert Lash; Editing by Jan Paschal)
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