MARKET SNAPSHOT: U.S. Stocks Turn Lower; Nasdaq Down 1.4%

By Anora Mahmudova, MarketWatch

NEW YORK (MarketWatch) -- U.S. stocks turned lower by late morning on Friday as optimism following a government report showing a steady pace of jobs growth dissipated.

The economy created slightly fewer jobs in March than forecast, but more jobs were added in January and February than earlier estimated. Mildly positive numbers are likely to encourage the Fed to keep monetary policy and tapering unchanged for the foreseeable future.

Modest gains at the open propelled the S&P 500 and the Dow Jones Industrial Average to intraday highs and all three main indexes were on track for weekly gains. However, indexes failed to sustain early optimism.

The S&P 500 (SPX) was 3 points, or 0.3%, lower at 1,885.86. Technology and consumer discretionary sector stocks were leading the losses, while investors piled into the defensive utilities sector.

The Dow Jones Industrial Average (DJI) slipped 12 points, or 0we.1%, to 16,562.02. Visa Inc (V), which fell 3.2% was leading the losses among the blue chips.

The Nasdaq Composite (RIXF) was the worst performing index, falling 57 points, or 1.3%, to 4,180.71, severely denting its weekly gain.

"The report was remarkably consistent with what we have been seeing in the past year or so, in one word good but not great," said Anthony Valeri, investment strategist at LPL Financial.

"Looking at the Fed fund futures, this might mean that the Fed will stay in the game a little longer than anticipated when it comes to raising rates," he added.

The U.S. created 192,000 jobs in March as hiring rebounded in the early spring. Hiring in January and February was also stronger than originally reported. The unemployment rate remained unchanged at 6.7% as more people went searching for jobs. Economist polled by MarketWatch expected a gain of 200,000 jobs.

"The post-winter rebound we hoped for did not happen, but the winter hit was smaller than previously believed," wrote Ian Shepherdson, chief economist at Pantheon Macroeconomics.

Shepherdson thinks the report was nonetheless solid, with food for thought for both sides of the FOMC: "Hawks will fret over the sustained payroll strength while doves will point to the (very) tentative signs of rising participation. The jury is out, but tapering continues."

GrubHub, Mylan, CarMax

Among individual stocks, GrubHub Inc. (GRUB) shares rose 40% in their market debut.

Mylan Inc (MYL) shares rose 4.6% after reports that Meda AB rejected its proposal to combine the two businesses. "All continued discussions between Meda and Mylan have been terminated without further actions," said Meda in a statement.

CarMax Inc. (KMX) shares fell 2.8% after fourth-quarter results fell short of Wall Street forecasts.

Shares of Anadarko Petroleum Corp. (APC) rose 1.7%, adding to a 14.5% gain on Thursday, after the company agreed to a settle all claims against its subsidiary Kerr-McGee for $5.15 billion. The case stems from the bankruptcy of Tronox Inc., which was spun off from Kerr-McGee before it was bought by Anadarko in 2006.

In overseas markets, European stocks rose slightly, leaving them poised for a ninth-straight gain. Stocks in Asia closed out mostly higher, though gains were muted ahead of the U.S. data. Gold (GCM4) moved higher, along with oil (CLK4), while the dollar fell against the Japanese yen after the jobs report.

More must-reads from MarketWatch:

DoubleLine's Jeffrey Gundlach: Stocks are vulnerable

Charles Schwab, Jack Bogle join the debate on high-frequency trading

For longtime unemployed, full-time work is elusive

Subscribe to WSJ: http://online.wsj.com?mod=djnwires