The market opened more than 1 percent lower after the report from the Labor Department showed the economy added just 54,000 jobs in May, compared with the rise of 232,000 jobs in nonfarm payrolls in April. The report also showed that the unemployment rate rose to 9.1 percent in May from 9 percent in April. May’s payrolls number was well below the 165,000 forecast by analysts in a Bloomberg survey.

Investors had been digesting weak signals about the economy in the days leading up to the monthly report, with gloomy reports on jobs, manufacturing and auto sales that helped to send stocks down by more than 2 percent this week to their biggest declines in percentage terms since last August.

In another indicator released Friday, the Institute for Supply Management said the service sector of the nation’s economy grew in May for an 18th consecutive month.

After their initial reaction to the jobs report, the three main indexes retraced some ground but never pushed into positive territory.

Shares in the telecommunications and information technology sector led the declines. American Tower fell 5.83 percent to $51.21. Verizon was down 1.49 percent at $35.63, and Sprint declined 4.38 percent to $5.67. Yahoo closed down 2.12 percent at $15.68.

The Dow Jones industrial average was down 97.29 points, or 0.79 percent, at 12,151.26. The Standard Poor’s 500-stock index fell 12.78 points, or 0.97 percent, to 1,300.16. The Nasdaq composite index fell 40.53 points, or 1.46 percent, to 2,732.78.

All three indexes closed the week more than 2 percent lower compared with the previous week. It was the third consecutive weekly loss for the Nasdaq.

The Treasury’s benchmark 10-year note rose 12/32, to 101 6/32, and the yield fell to 2.99 percent from 3.03 percent late Thursday.

The jobs numbers seemed more to disappoint than to surprise the market.

David Kelly, the chief market strategist for J.P. Morgan Funds, said it had been clear that the number would be weak because recent data, particularly for payrolls and initial unemployment benefit claims, had suggested the direction.

“A lot of individual investors are skittish, and they will sell first and ask questions later,” Mr. Kelly said of the expected response. “But for the long-term investors it is better to ask the questions first.”

Lawrence Creatura, portfolio manager at Federated Clover Investment Advisors, said investors were more risk-averse than they were about a month ago and unlikely to carry too much risk over the weekend, which has an impact on pricing.

“We are in an environment where the volatility of the underlying data is increasing,” Mr. Creatura said. “Today being a Friday, and being confronted with some pretty dark employment data, investors should be ready for anything.”

The last time the Dow closed lower for five consecutive weeks was the five-week period ending on July 23, 2004.

But some economists expect the economy to pick up in the latter part of the year.

Mr. Kelly said he expected economic growth to pick up, averaging above 3 percent in quarterly growth rates in the second half of the year compared with the 2 percent he forecast for the second quarter. He said growth was more likely than another recession because of factors including a weak dollar, easy monetary conditions and pent-up demand. Corporate profits are also poised to grow.

“For long-term investors that is still the way I would play this,” he added. “But in the short run this is going to raise a lot of fears about something worse.”

“Because of that, stocks are a better value than bonds,” Mr. Kelly said.

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