Investors skittish ahead of voting

NEW YORK – U.S. stocks fell sharply on Friday, as cheer over better-than-expected employment data gave way to nervousness ahead of the U.S. presidential election next week.

The equity market had been buoyed at the open by data showing that the American economy created more jobs than expected in October, pointing to a gradual but steady improvement in the labor market.

But jitters about Tuesday’s presidential and congressional elections quickly prevailed.

“Investors are telling me they’re doing nothing until next week,” said Dan Greenhaus, chief global strategist at BTIG. “All that matters at this point is the fact that the election is in a few days.”

The Dow Jones industrial average dropped 139.46 points, or 1.1 percent, to 13,093.16. The blue-chip index posted a 0.1 percent decline for the week.

Oil giant Chevron Corp. and equipment maker Caterpillar Inc. were the top losers in the Dow, falling 2.8 percent and 2.1 percent, respectively. Bank of America Corp. was the top gainer in the Dow, with its shares ending up 1.1 percent.

The S&P 500 index lost 13.39 points, or 0.9 percent, to end at 1,414.20. For the week, the index gained 0.2 percent.

The Nasdaq composite index fell 37.93 points, or 1.3 percent, to 2,982.13. For the week, it dropped 0.2 percent.

After trading flat for most of the morning, U.S. stock futures had turned higher when the government reported that nonfarm payrolls increased by 171,000 in October, more than the 120,000 rise expected by economists.

Hiring also rose faster than expected in the preceding two months than previously believed, the data showed.

The unemployment rate, drawn from a separate survey of about 60,000 households, edged up to 7.9 percent from 7.8 percent, as expected. The jobs report comes just days before Tuesday’s presidential election between President Barack Obama and Republican challenger Mitt Romney.