A turbulent week of trading ended Friday with U.S. stocks finishing lower for the third time in five days.
The decline followed two days of big gains and nudged major indexes lower for the year.
A slide in oil prices deepened, stoking concerns about global economic growth. Energy stocks tumbled, extending their losses for the year.
Investors also were discouraged by a report showing that average U.S. hourly pay declined in December, despite another strong increase in hiring.
"We finally got the jobs growing," said Erik Davidson, chief investment officer of Wells Fargo Private Bank. "Now people are looking through that at the actual wage growth numbers and they want to see improvement on wages, which obviously would spur demand and consumer confidence."
The Standard & Poor's 500 index shed 17.33 points, or 0.8 percent, to 2,044.81. The index is now down 0.7 percent for the year.
The Dow Jones industrial average slid 170.50 points, or about 1 percent, to 17,737.37. The Dow has fallen 0.5 percent this year.
The Nasdaq composite lost 32.12 points, or 0.7 percent, to 4,704.07. It's down 0.7 percent this year.
After a long period of relative calm, stock markets have become more volatile as investors grapple with slowing global growth and slumping oil prices. A gauge of investor anxiety, the Chicago Board Options Exchange's volatility index, or VIX, rose 3 percent to 17.5 on Friday, up from 12 a month ago.
"It's going to be a volatile year, but I think if you remain a long-term investor ... and you push out this volatility and you focus on the trends, I think (the stock market) is going to have a pretty good year," said Robert Pavlik, chief market strategist at Banyan Partners.
A combination of positive U.S. economic news, hopes for stimulus from Europe's central bank and renewed confidence that the Federal Reserve will keep supporting the economy helped push stocks higher in the middle of the week after a tough start to the year.
But by Friday, the jobs data and a renewed decline in oil prices put traders in a selling mood once again.
U.S. crude fell 43 cents, or 0.9 percent, to close at $48.36 a barrel in New York on further evidence that OPEC will not cut production in an effort to support prices. In London, Brent crude fell 85 cents, or 1.7 percent, to $50.11 a barrel, setting a new five and a half-year low.
The price of oil has fallen by more than half since June as traders anticipate a glut of supply caused by increased production. The slide also has stoked concern about the already troubled state of economies overseas.
"Is it a canary in the coal mine for bigger global economic concerns?" Davidson said. "Is oil telling us something about the future of the global economy?"
The latest U.S. jobs data also gave some investors reason for concern.
The government reported that employers added 252,000 jobs in December, slightly more than economists expected. The government also noted that more jobs were added in October and November than it had previously estimated.
Still, average hourly pay slipped 5 cents in December. And the unemployment rate fell to 5.6 percent from 5.8 percent in part because many of the jobless gave up looking for work and were no longer counted as unemployed.
Among individual stocks, Avon Products declined the most among companies in the S&P 500. The stock shed 66 cents, or 7.5 percent, to $8.17. It's down 13 percent this year.
All 10 sectors in the S&P 500 fell. Financial stocks were the biggest losers on the day. The sector is down 2.4 percent this year.
In government bond trading, prices rose. The yield on the benchmark 10-year Treasury fell to 1.95 percent from 2.02 percent on Thursday.
The euro edged up to $1.1841 from $1.1792 the previous day. The dollar fell to 118.51 yen from 119.80 yen.
In metals trading, gold edged up $7.60 to $1,216.10 an ounce, silver rose three cents to $16.42 an ounce and copper fell two cents to $2.75 an ounce.
In other futures trading on the NYMEX:
— Wholesale gasoline fell 1.8 cents to close at $1.323 a gallon.
— Heating oil fell 0.8 cent to close at $1.703 a gallon.
— Natural gas rose 1.9 cents to close at $2.946 per 1,000 cubic feet.
Among other stocks making big moves Friday:
— Star Bulk Carriers sank 23.1 percent after the global shipping company priced a public offering of stock below the previous day's closing price. The stock slid $1.51 to $5.02.
— Ruby Tuesday's latest quarterly revenue fell short of expectations as sales at restaurants open at least a year declined. Shares in the chain-restaurant operator shed 83 cents, or 11.7 percent, to $6.27.
— Agenus jumped 28.7 percent on news that the biotechnology company signed a licensing, development and commercialization deal with Incyte for immuno-therapeutics. Agenus rose $1.18 to $5.29. Incyte fell $1.18, or 1.6 percent, to $72.03.
AP Markets Writer Steve Rothwell in New York contributed to this report.