Traders at the New York Stock Exchange on Friday. The Dow Jones industrial average fell 666 points amid signs that interest rates are heading higher.
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Updated at 6:01 p.m. ET
Major stock indexes dropped sharply Friday, with the Dow Jones industrial average tumbling 666 points amid signs that wage growth is finally picking up.
The 2.6 percent drop in the Dow came as the Labor Department reported that 200,000 jobs were added to the economy last month, which was stronger than expected, and the unemployment rate stayed at 4.1 percent — the lowest since 2000.
But worries about inflation grew when the report showed that average hourly wages grew 2.9 percent from a year ago — the largest increase since June 2009. Yields for 10-year Treasurys hit four-year highs Friday.
The Dow closed at 25,520.96, and Friday's 666-point drop was the sixth-worst ever. The index is still up more than 3 percent since the year began. But with a loss of about more than 1,000 points since Monday, it was the blue chip index's worst weekly performance in two years.
Among the stocks in the Dow, Apple fell 4.3 percent Friday, Exxon Mobil lost 5.1 percent, Chevron was down nearly 6 percent and Goldman Sachs dropped 4.5 percent.
Other major stock indexes fell about 2 percent Friday. The broader S&P 500 slid 60 points, to 2,762.13; the Nasdaq index lost 145 points, closing at 7,240.95.
Carl Tannenbaum, chief economist at Northern Trust, says Friday's employment report shows the economy continues to have a lot of energy.
The higher wage growth and potentially higher inflation "might then lead the Federal Reserve to raise their interest rates more rapidly than the market is comfortable with," he told NPR's John Ydstie.
But, he says, "The stock market was really due to come down anyway. We have these corrections. They're normal. You can't have stocks rising at these levels all the time."