1st LD Writethru: U.S. stocks keep falling despite upbeat jobs data

U.S. stocks reversed early gains to end sharply lower Friday, with the Nasdaq Composite Index on a seven-session losing streak, as Wall Street digested a stronger-than-expected jobs report.

The Dow Jones Industrial Average fell 167.65 points, or 1.02 percent, to 16,346.45. The S&P 500 lost 21.06 points, or 1.08 percent, to 1,922.03. The Nasdaq decreased 45.79 points, or 0.98 percent, to 4,643.63.

U.S. total nonfarm payroll employment rose by 292,000 in December, well above market estimates of 200,000, and the unemployment rate was unchanged at 5 percent, said the U.S. Labor Department Friday.

In December, average hourly earnings for all employees on private nonfarm payrolls were little changed at 25.24 U.S. dollars, following an increase of 5 cents in November. Over the year, average hourly earnings have risen by 2.5 percent.

"A huge jobs gain in December was likely boosted by unusually clement weather. But from the Fed's perspective, it's vindication nonetheless of the decision to hike in December," said Chris Low, chief economist at FTN Financial, in a note.

Overseas, China's shares showed signs of stabilization, with the benchmark Shanghai Composite Index moving up 1.97 percent Friday, after the China Securities Regulatory Commission (CSRC) announced that the stock market "circuit breaker" mechanism would be suspended.

European equities continued to decline Friday. Germany's benchmark DAX index at Frankfurt Stock Exchange dropped 1.31 percent, while Britain's benchmark FTSE 100 Index decreased 0.70 percent.

In a weekly basis, all three major indices posted steep losses, with the Dow, the S&P 500 and the Nasdaq plummeting 6.2 percent, 6.0 percent and 7.3 percent, respectively. Endit