U.S. stocks fell modestly in a day of volatile trading Friday, after a disappointing jobs report cast fresh doubts over hopes for the U.S. economic recovery.

The Dow Jones Industrial Average closed down 21.42, or 0.20%, to 10653.56. The Dow climbed 1.79% this week and is up 2.16% year to date.

J.P. Morgan Chase was the measure's weakest component, sliding 83 cents, or 2%, to 40.44, on a day when riskier stocks took the biggest hit as the economic outlook darkened.

The weaker than expected July jobs report and the added blow of a sharp downward revision to June's jobs losses, sent the benchmark indexes sliding to triple digit losses.

But losses were pared later in the day as cautious investors stepped back, anticipating the weak jobs data could prompt the U.S. Federal Reserve to take further measures at its meeting this week to stimulate the economy.

The Nasdaq Composite fell 4.59, or 0.2%, to 2288.47, though the measure gained 1.5% this week and is up 0.85% since the year's start.

The Standard & Poor's 500 share index shed 4.17, or 0.37%, to 1121.64 Friday, weighed by its energy and financial sectors. The S&P 500 gained 1.82% over the week and is now up 0.59% year to date.

Leading the decline among energy stocks, oil and gas producer EOG Resources slid 3.18, or 3.1%, to 99.26, after its second quarter earnings missed analysts' expectations and said it would increase spending this year.

The company also said it plans to sell some of its natural gas assets to accelerate its transformation into an oil producer.

But investors said the largely better than expected corporate quarterly reports that have dominated recent market movements took a backseat Friday to the jobs data and its potential impact on the central bank's decisions.

European market

European shares ended lower Friday after weaker-than-expected U.S. nonfarm payrolls data reignited worries about the sustainability of the U.S. economic recovery.

After trading as high as 263.42 early in the session, the Stoxx Europe 600 index declined 1.1% to finish at 258.71 points. Investors had been hoping that U.S. jobs data would show strong signs of recovery in the U.S. labor market. Instead, private sector payrolls rose by a lower than expected 71,000 in July.

Total nonfarm payrolls fell by a seasonally adjusted 131,000 in July, but all the lost jobs were temporary jobs at the U.S. Census.

Shares of personnel services firm Adecco SA fell nearly 4% in Zurich and those of Randstad Holding NV dropped 3.3% in Amsterdam. Of the major regional benchmarks, the German DAX index fell 1.2% to 6,259.63 points.

The biggest decliners included Heidelberg Cement AG, whose shares slipped 3.8%, and car maker Daimler AG, whose shares fell 2.3%.

In France, the CAC-40 index ended down 1.3% to 3,716.05, as shares of PSA Peugeot Citroen dropped 3.7%. The blue chip stock indexes in Spain and Portugal both ended down nearly 2%. Shares of Spanish banking giant Santander fell 2.6%. The U.K. FTSE 100 index fell 0.6% to 5,332.39 points.

Asian market

Asian stocks ended mixed Friday as investors mostly stayed cautious ahead of the U.S. payrolls report due later, while shares in Shanghai climbed after China's banking regulator sought to reassure markets on the reasons behind stress tests for the banking sector.

China's Shanghai Composite ended 1.4% higher and Japan's Nikkei Stock Average was down 0.1%, while South Korea's Kospi Composite ended little changed. Hong Kong's Hang Seng Index closed up 0.6%.

The China Banking Regulatory Commission sought to play down the meaning of the stress tests designed to assess the impact of a sharp fall in property prices, even as separate reports Friday said such tests were being expanded to include credit risks from the cement and steel sectors.

The banking regulator said on Thursday that the tests did not indicate the government's assessment of property market trends or a possible change in property loan policy, and were part of its efforts to boost risk controls and prevent a liquidity crisis in the banking sector.

Property developers reversed the previous day's losses with Poly Real Estate Group up 1.3% after falling 4.5% Thursday, while China Vanke edged up 0.1% after shedding 3.0% the day before.

Commodities and base metals

Base metals on the London Metal Exchange ended mixed Friday as the metals gave back most of their early gains following disappointing U.S. jobs data.

Equity markets dropped on the poor figures while the euro surged to a three month high against the dollar as investors downgraded their outlook for the U.S.

Copper ended 0.4% lower at $7,370 a metric ton. Lead, aluminum closed slightly lower, while nickel gained 1%, zinc 1.4% and tin eked out slim gains.

Crude oil futures Friday fell for a third consecutive day as weakness in the U.S. job market hit expectations for energy demand.

Light, sweet crude for September delivery settled down $1.31, or 1.6%, at $80.70 a barrel on the New York Mercantile Exchange, the lowest settlement price since July 30.

Brent crude on the ICE futures exchange ended down $1.45, or 1.8%, at $80.16 a barrel. The U.S. economy in July lost jobs for a second consecutive month, the Labor Department said Friday.

The report added to worries that the economic recovery will continue to struggle, leaving the demand outlook for commodities uncertain.

Gold futures climbed following disappointing U.S. payrolls data, as investors' appetite for perceived safer places to put their money also sent Treasury prices higher and the U.S. dollar lower while equities and industrial commodities such as oil and copper fell.

The most actively traded gold contract, for December delivery, rose $6, or 0.5%, to settle at $1,205.30 an ounce on the Comex division of the New York Mercantile Exchange.