U.S. stocks decline on disappointing jobs data

U.S. stocks pared part of early losses to end modestly lower Friday, as the country's nonfarm payrolls data came out much worse than expected.

The Dow Jones Industrial Average fell 31.50 points, or 0.18 percent, to 17,807.06. The S&P 500 decreased 6.13 points, or 0.29 percent, to 2,099.13. The Nasdaq Composite Index dipped 28.85 points, or 0.58 percent, to 4,942.52.

U.S. total nonfarm payroll employment increased by 38,000 in May, well below the market consensus of 158,000 and notching the fewest monthly job gains in almost six years, the Labor Department reported Friday.

The unemployment rate, however, declined by 0.3 percentage point to 4.7 percent in May.

The payrolls data pointed to labor market weakness and raised doubts if the economy was healthy enough to absorb an interest rate hike in the coming months.

"This is not a good report, and it may well give Fed officials second thoughts about increasing interest rates again this month or next, as some have suggested lately," said Peter Ireland, an economics professor at Boston College, quotes from Reuters.

Meanwhile, the U.S. non-manufacturing index registered 55.7 percent in May, 2.8 percentage points lower than the May reading of 55.7 percent, the Institute Supply Management reported Friday.

"The pullback in May's ISM non-manufacturing index is consistent with this morning' s employment report, which saw a slowdown in overall hiring including the lowest private-service providing payroll growth since June 2012," said Sophia Kearney-Lederman, an economic analyst at FTN Financial. Endi