The early release of the Institute for Supply Management's service sector index, which wasn't due until Tuesday, showed greater-than-expected growth in non-manufacturing businesses — and a sharp jump in consumer prices. That worried skittish investors that inflation might yet take hold and prompt the Federal Reserve to push for potentially jarring interest rate hikes.

The announcement stole momentum from the Labor Department's jobs report, usually the most important piece of economic data every month. Only 110,000 new jobs were created in March — half of what economists had expected. February's figure also was revised lower by 19,000 jobs. The nation's unemployment rate fell to 5.2 percent from 5.4 percent in February.

"We rallied nicely on the jobs report, but then we got a conflicting message from the ISM report. That report doesn't usually carry as much weight, but it hit the bond market hard, and that moved to stocks pretty quickly," said Brian Pears, head equity trader at Victory Capital Management in Cleveland. "In a market where we're really this nervous to begin with, it only takes a little bit to turn things around."

The Dow Jones industrial average fell 99.46, or 0.95 percent, to 10,404.30.

Broader stock indicators also retreated. The Standard & Poor's 500 index slipped 7.67, or 0.65 percent, to 1,172.92, while the Nasdaq composite index dropped 14.42, or 0.72 percent, to 1,984.81.

Continuing fears of inflation, prompted by higher oil prices and a growing economy, plagued the markets during the week, as they have done for most of March, despite a strong session on Wednesday. For the week, the Dow lost 0.37 percent and the Nasdaq fell 0.31 percent. The S&P 500 posted its first gain in the past four weeks, rising 0.13 percent.

The bond market managed its fourth straight session of gains even after falling initially on the ISM services report. The yield on the 10-year Treasury note fell to 4.45 percent from 4.48 percent on Thursday. The dollar rose against most major currencies, while gold prices fell.

A sharp jump in oil prices also sapped investors' confidence. After reaching an intraday record of $57.70, a barrel of light crude settled at a closing record of $57.27, up $1.87, on the New York Mercantile Exchange.

"The 800-pound gorilla in the middle of the room is the lift in oil prices," said A.C. Moore, chief investment strategist for Dunvegan Associates in Santa Barbara, Calif. "As prices go up in oil and energy, it's a direct tax on the economy without any corresponding benefit, with the exception of the earnings of energy companies."

The ISM services index — mistakenly released alongside ISM's manufacturing report — came in at 63.1 for March, far more than the 59 reading expected on Wall Street and sharply higher from February's 59.8 reading. With the service sector such a strong part of the economy, and another part of the report saying that service providers are charging higher prices, investors feared the growth could trigger inflation.

The ISM manufacturing index, which was initially thought to be much higher due to a snafu in news releases issued by ISM, pointed to modest activity. The index, which measures the strength of industrial activity, came in at 55.2, slightly better than the 54.9 reading economists expected but still down from 55.3 in February.

Qwest Communications International Inc. slipped 6 cents to $3.64 as the telecommunications company made yet another attempt to break up Verizon Communications Inc.'s takeover of MCI Inc. Qwest is now offering $8.94 billion for MCI, far more than the $7.51 billion in the Verizon offer, which MCI accepted earlier in the week. MCI added 39 cents to $25.29, while Verizon was down 31 cents at $35.19.

Regulators are expanding their probe into insurer American International Group Inc.'s accounting and operations, according to The Wall Street Journal, looking at a wider swath of the company's insurance transactions. The Journal also reported that former Chairman Maurice "Hank" Greenberg stepped down after the New York attorney general threatened a criminal indictment against the company if Greenberg were still in charge. AIG fell $4.46 to $50.95.

Taser International Inc. tumbled $1.58, or 13.2 percent, to $10.42 after the stun-gun maker warned of a revenue shortfall for the quarter due to negative publicity surrounding risks associated with its non-lethal weapons. The company said it is launching an education campaign.

Profits at Best Buy Co. Inc. rose 22 percent for the fourth quarter as higher sales of low-margin electronics made up for declining revenues in other areas. The company's first-quarter and full-year profit outlooks, however, were below analysts' current estimates, and Best Buy dropped $3.41 to $50.60.

Declining issues outnumbered advancers by a 5 to 4 ratio on the New York Stock Exchange, where consolidated volume came to 2.24 billion shares, compared with 2.21 billion traded on Thursday.

The Russell 2000 index of smaller companies was down 3.52, or 0.57 percent, at 611.55.

Overseas, Japan's Nikkei stock average rose 0.47 percent. Britain's FTSE 100 rose 0.4 percent, Germany's DAX index gained 0.57 percent, and France's CAC-40 climbed 0.3 percent.

The Dow Jones industrials ended the week down 38.57, or 0.37 percent, finishing at 10,404.30. The S&P 500 index gained 1.50, or 0.13 percent, to close at 1,172.92.

The Nasdaq fell 6.25, or 0.31 percent, during the week, closing Friday at 1,984.81.

The Russell 2000 index, which tracks smaller company stocks, closed the week 3.72, or 0.6 percent, lower at 611.55.

The Dow Jones Wilshire 5000 Composite Index — a free-float weighted index that measures 5,000 U.S. based companies — ended the week at 11,568.74, up 7.05 points from last week. A year ago the index was 11,202.42.