US STOCKS-Wall St on track for worst weekly decline in 2013

Fri Apr 5, 2013 12:36pm EDT

* S&P 500 on track for biggest weekly decline of 2013

* U.S. employers hired at the slowest pace in nine months in March: data

* F5 Networks plunges after weak outlook, weighs on peers

* Indexes down: Dow 0.8 pct, S&P 0.9 pct, Nasdaq 1.1 pct

By Angela Moon

NEW YORK, April 5 (Reuters) - U.S. stocks fell on Friday, setting the S&P 500 for its worst weekly performance of the year, in the wake of a payrolls report that was much weaker than expected, the latest in a series of data to indicate economic growth may be losing momentum.

The S&P 500 was down about 1.5 percent for the week. Losses were broad, with about 80 percent of stocks on the New York Stock Exchange and Nasdaq trading in negative territory.

About 88,000 jobs were added in March, less than half the forecast of 200,000, though the unemployment rate dipped to 7.6 percent from 7.7 percent. The report follows similarly disappointing reads on the manufacturing and services sector, as well as other poor labor market data.

"The numbers were certainly disappointing but it has only been a week of some bad data points. We will have to see a steady continuation of this to say it is becoming a trend," said JJ Kinahan, Chicago-based chief derivatives strategist at TD Ameritrade.

"We didn't go below the 1,538 yet on the S&P 500, which is an area of support. If we can hold above this for the next few days, we could bounce significantly."

The Dow Jones industrial average was down 109.38 points, or 0.75 percent, at 14,496.73. The Standard & Poor's 500 Index was down 13.27 points, or 0.85 percent, at 1,546.71. The Nasdaq Composite Index was down 34.80 points, or 1.08 percent, at 3,190.18.

F5 Networks Inc was the S&P's biggest percentage loser, dropping nearly 20 percent to $72.55, a day after forecasting second-quarter earnings and revenue that were well below expectations.

Several of F5's peers were also sharply lower, with Juniper Networks off 4.6 percent at $17.27 and Citrix Systems down 2.6 percent at $67.90.

Airline stocks were hit after J.P Morgan Securities cut its revenue expectations for U.S. airlines by 2 percent to 3 percent for 2013 and 2014 and said it expects monthly revenue per available seat mile (RASM) to turn negative for some airlines, hurt by sequestration.

Delta Airlines Inc fell 4.8 percent to $14.04 and United Continental Holdings was off 2.9 percent at $28.46.

Retailers also weakened, with the SPDR S&P Retail exchange-traded fund down 1.1 percent at $69.42.

If the S&P closes down on the week, it will be only the third weekly loss this year for the index, which has gained about 8 percent this year without a significant pullback, leading many analysts to call for one.

Equity market gains have been partially fueled by a bond-buying program by the Federal Reserve. Measures from central banks around the world have also helped, and on Thursday, Wall Street rose after the Bank of Japan announced aggressive policies to jump-start its economy.

Friday's payroll report "should reinforce the Fed's recent bond buying activity; but that may not be enough to turn today's bearish feelings in the markets," said Todd Schoenberger, managing partner at LandColt Capital in New York.

Energy shares were pressured, as the group is closely tied to economic growth expectations. Crude oil fell for a third straight day, dropping 0.6 percent and extending its decline for the week to more than 5 percent. Chevron Corp fell 1 percent to $116.85.

Earnings forecasts have been scaled back heading into first-quarter reports, due to be kicked off next week by Alcoa . S&P 500 earnings are expected to have risen just 1.6 percent from a year ago, according to Thomson Reuters data, down from 4.3 percent forecast in January. Alcoa stock was down 0.5 percent at $8.18.

Geopolitical tensions will remain in focus after North Korea placed two of its intermediate range missiles on mobile launchers and hid them on the east coast of the country, South Korean media reported on Friday.