Investors were satisfied with — but not impressed by — the Labor Department's latest reading on unemployment, which fell to 5.4 percent from 5.5 percent in July, and the 144,000 jobs created in August was close to the 150,000 Wall Street expected.

"I think this continues the pattern of decent economic growth," said Ken Tower, chief market strategist for Schwab's CyberTrader. "It's not lighting a fire under anyone, nor is it suggesting the economy is on the edge of a serious contraction. So the market can focus elsewhere, with oil prices likely the biggest hinge for the market right now."

One day after a sharp drop in crude oil sparked a major stock rally, a barrel of crude was quoted at $43.99, down 7 cents, on the New York Mercantile Exchange.

Meanwhile, profit warnings from Intel continued to weigh on the market, hurting not only technology shares but also raising concerns about third-quarter earnings in other sectors.

According to preliminary calculations, the tech-focused Nasdaq composite index dropped 28.95, or 1.6 percent, to 1,844.48.

The Dow Jones industrial average fell 30.08, or 0.3 percent, to 10,260.20, while the Standard & Poor's 500 index was down 4.68, or 0.4 percent, at 1,113.63.

For the week, the Dow gained 0.6 percent and the S&P rose 0.5 percent, while the Nasdaq fell 1 percent. It was the fourth straight week of gains for the Dow and S&P, while the Nasdaq reversed direction after two positive weeks.

Due to the Republican National Convention and the usual slowdown in trading before Labor Day, volume on the major markets was extremely low during the week. Most of the trading during the week mirrored the vagaries of crude oil prices, which dropped from last months highs of more than $49 per barrel.

Many investors stayed out of the market altogether until the RNC safely concluded and the Labor Department's jobs report gave them some insight into the strength of the economy. The light volume made it difficult for analysts to read any trends into the market's activity this week.

While the gain in payrolls fell short of expectations, August's new jobs were the most created since May and marked a full year of job growth across the nation. Job figures for June and July were also revised upward.