Stocks slipped Friday after an unexpectedly weak monthly U.S. jobs report and a disappointing forecast from No. 1 computer chip maker Intel Corp. (INTC) cast a pall over investor sentiment.

The Dow Jones industrial average (search) ended down 68.14 points, or 0.69 percent, at 9,862.68. The Standard & Poor's 500 Index (search) ended off 8.22 points, or 0.77 percent, at 1,061.50. The technology-laden Nasdaq Composite Index (search) dropped 30.98 points, or 1.57 percent, to 1,937.82.

The major indexes ended the week on a mixed note. The blue-chip Dow rose 0.82 percent, while the S&P 500 gained 0.31 percent. But the Nasdaq fell 1.14 percent.

While the government announced the creation of 57,000 new jobs last month, that figure was well off the 150,000 Wall Street expected. And Intel, while predicting revenue growth, wasn't as upbeat as investors had hoped.

"We're digesting the jobs news and the Intel outlook last night," said Owen Fitzpatrick, a managing director at Deutsche Bank Private Wealth Management. "We're seeing a sell-off in tech, but I don't think it's going to last, given the fact we're still ramping up momentum on the positive side."

The number of workers on U.S. payrolls outside the farm sector edged up by 57,000 in November, the government said, compared with an upwardly revised climb of 137,000 in the previous month. The November gain was far lower than forecasts for a huge increase of 150,000.

But in an encouraging sign for the health of the labor market, the unemployment rate (search) edged down to 5.9 percent, its lowest level since March, from 6.0 in October.

Poor job creation has been a consistent concern in recent weeks even as other signs of a strong recovery have emerged. Economists worry that U.S. companies, in a bid to keep operating costs low, are producing more overseas where salaries are lower rather than hiring in the states. Without growth in jobs and salaries here, there are fears that consumer spending may sputter, undermining the recovery.

"We need 150,000 jobs per month just to maintain unemployment at the current level and to keep up with the population entering the work force, and we haven't seen that amount of growth in more than two and a half years," said Lawrence Mishel, president of the Economic Policy Institute, a Washington-based think tank.

Notably, the employment report showed that job losses at U.S. factories continued for the 39th consecutive month in November, with payrolls falling by 17,000. But the pace has slowed, and in a sign of possibly better days ahead for manufacturing, the Commerce Department said Friday that new orders to U.S. factories rose by 2.2 percent in October, the strongest increase in 15 months and the fifth in the past six months.

Intel dragged on the technology sector, after the No. 1 semiconductor maker failed to raise the top of its quarterly sales forecast and disclosed a $600 million charge for a poorly performing wireless business late Thursday. The report dashed investors' hopes for an outlook that would show the economy's accelerating recovery is finally feeding into corporate America's profits.

"In order for those stocks to continue to be the driver for this market, analysts must continue to be surprised on the upside by the companies," said Stuart Freeman, chief equity strategist for A.G. Edwards & Sons in St. Louis.

Intel was among the Nasdaq's most actively traded stocks. It fell $1.44, or 4.29 percent, to $32.10, and was the blue-chip Dow's biggest percentage loser. Other chip shares followed suit, sending the Philadelphia Stock Exchange's Semiconductor Index (search) down 3.19 percent.

Kmart Holdings Corp. (KMRT)shares tumbled, after it reported a narrower quarterly loss from a year earlier when it was in bankruptcy, but its sales slumped as it cut fewer prices in hopes of turning a profit.

Shares of Kmart, the No. 3 U.S. discount chain, which filed the largest-ever retail bankruptcy in January 2002, fell $1.90 or 6 percent to $29.40.

Department store operator Sears, Roebuck and Co. (S) fell, after saying its November sales at stores open at least a year fell a worse-than-expected 3.6 percent, due to weak early holiday spending. Sears shares fell $3.63, or 6.9 percent, to $48.96.

One bright spot was Caterpillar Inc. (CAT), up $1.56 at $76.50 following an upgrade from Citigroup Smith Barney.

The Russell 2000 index of smaller companies was down 3.10 or 0.6 percent at 541.05.

In bond trading, short-term Treasury yields registered their steepest one-day drop since just after the Sept. 11, 2001, attacks, after the weak jobs report suggested the Federal Reserve would hold interest rates steady at 45-year lows for some time.

The price of the benchmark 10-year Treasury note climbed more than a full point, rising 1-5/32 to 100-7/32 late Friday afternoon, driving its yield down to 4.22 percent from 4.37 percent late Thursday.

Overseas, Japan's Nikkei stock average fell 0.5 percent, Britain's FTSE 100 fell 0.3 percent, and France's CAC-40 fell 1.1 percent, and Germany's DAX index was down 0.9 percent.

Reuters and the Associated Press contributed to this report.