The financial sector led a drop in U.S. stocks Friday as an adverse foreclosure ruling for banks in a Massachusetts court gave investors another cause for concern, in addition to a disappointing jobs report.

The Dow Jones Industrial Average dropped 22.55 points, or 0.19%, to 11674.76.

The Dow's financial components led its decline, with J.P. Morgan Chase slipping 1.9% and Bank of America falling 1.3%.

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Weighing on the banks, the Massachusetts State Supreme Judicial Court upheld a decision that two foreclosures from U.S. Bancorp and Wells Fargo were invalid because the banks failed to show they held the mortgages at the time of the foreclosure.

U.S. Bancorp dropped 0.8% and Wells Fargo declined 2%.

Neither stock is in the Dow.

The Nasdaq Composite fell 6.72, or 0.25%, to 2703.17.

The Standard & Poor's 500 index decreased 2.35, or 0.18%, to 1271.50, led by its financial sector as investors fretted over how the ruling against U.S.

Bancorp and Wells Fargo could influence similar cases for other banks.

Among the other banks that fell, Regions Financial dropped 1.7% and BB&T declined 2.1%.

Still, U.S. stocks concluded the first week of 2011 in the black, with the Dow up 0.84% and the S&P 500 up 1.1% on the week.

Much of the gains were made Monday and Wednesday, with Monday's rally coming on optimism for the new year while Wednesday's climb followed a stronger than expected report on private sector jobs for December.

But investors were disappointed Friday by monthly employment data showing nonfarm payrolls rose 103,000 last month as private-sector employers added 113,000 jobs, missing economists' estimate for a gain of 150,000 jobs.

The unemployment rate, obtained from a separate household survey, fell to 9.4% last month, the lowest level since May 2009 and the biggest fall in more than a decade.

It beat expectations for a 9.7% rate, although it was impacted by a drop in the civilian labor force participation rate to 64.3%, from 64.5%.

Federal Reserve Chairman Ben Bernanke said Friday that the central bank remains unwaveringly committed to maintaining price stability.

The Fed's bond-buying program is justified, he said, because unemployment is likely to remain above 8% for the next two years and inflation will remain subdued.

European Markets

European stocks ended lower Friday, as euro zone debt worries resurfaced and data showed that the U.S. economy added fewer jobs than expected in December.

The Stoxx Europe 600 index slipped 0.2% to 281.02 points, although it still posted weekly gains of 1.9%.

Portugal led the Continent lower Friday, as the cost of insuring euro-zone debt rose on concerns about upcoming bond issuance by Lisbon, and the ongoing political stalemate in Belgium.

Portugal's PSI 20 index fell 3%, pressured by a 5.3% tumble in the shares of Banco Espirito Santo.

Food retailer Jeronimo Martins slipped 2.8%.

In Madrid, the IBEX 35 index dropped 1.5%, as Banco Santander fell 2.2% and rival BBVA retreated 2.5%. Besides debt fears, U.S. jobs data were in the spotlight.

While the headline payroll number was a disappointment, it was countered by positive net revisions to the October and November figures as well as by the drop in the jobless rate, Danske Bank said in a note.

In France, the CAC 40 index slipped 1% to 3,865.58, with banking giant Societe Generale slumping 3% and cement firm Lafarge SA dropping 2%.

In Germany, food retailer Metro AG fell 1.6%, weighing on the DAX 30 index, which dropped 0.5% to 6,947.84.

The FTSE 100 index fell 0.6% to 5,984.33 in London, as shares of technology firm ARM Holdings PLC tumbled 4.7%, giving up some of their strong recent gains.

Asian Markets

Asian markets ended mixed Friday, with Japanese shares eking out gains as a weaker yen spurred auto stocks higher ahead of key U.S. employment data, while Indonesian and Indian stocks fell sharply on inflation concerns.

Japan's Nikkei Stock Average edged up 0.1%, South Korea's Kospi added 0.4%, China's Shanghai Composite gained 0.5%, and Hong Kong's Hang Seng Index slipped 0.4%.

In Tokyo, stocks recorded a modest gain ahead of eagerly awaited U.S. jobs data and as the dollar hit a fresh two week high against the yen, with auto related shares rising sharply on hopes for a turnaround in key North American markets.

Nissan closed up 4.4%, its highest level since August 2008, while Toyota gained 2.2% and auto parts maker Denso rose 1.5%.

In South Korea, gains in auto plays also helped to bolster the market, with Hyundai Motor adding 2.1% and Kia Motors rising 2.1%.

Regional markets were also weighed by declines in some resource-sector shares, on a recent correction in some commodity prices under the weight of a strengthening U.S. dollar.

Cnooc lost 2.4% and PetroChina shed 0.8% in Hong Kong and Inpex lost 1.7% in Tokyo.

Base Metals

Base metals closed mostly lower on the London Metal Exchange Friday, unable to overcome a stronger dollar and a mixed U.S. jobs report despite paring losses during afternoon trade in Europe.

LME three month copper closed the day down 0.6% at $9,415 a metric ton, as a slump in the euro weighed on the metal.

Three month tin was the only base metal to close the day in positive territory, ending the PM kerb up 0.9% at $26,450/ton on ongoing supply concerns.

The exchange's three month aluminum contract which closed down just $1 at $2,517/ton also put in a strong performance, though, rallying to a high of $2,541/ton before profit taking pulled prices lower again. It is the highest the metal has traded since September 2008.

Oil prices settled at their lowest level in three weeks Friday after a report showed the U.S. economy added fewer jobs than expected last month.

Light, sweet crude for February delivery settled down 35 cents, or 0.4%, at $88.03 a barrel on the New York Mercantile Exchange.

Brent crude on the ICE futures gave up $1.07, or 1.1%, at $93.44 a barrel.

Gold prices ended near steady after a mixed employment report and Federal Reserve Chairman Ben Bernanke's comments about the slow pace of U.S. economic growth helped the market recoup earlier losses.

The thinly traded January delivery contract settled down 0.2%, or $2.90, at $1,368.50 per troy ounce on the Comex division of the New York Mercantile Exchange.

The most actively traded contract, for February delivery, was down 0.2%, or $2.80, at $1,368.90 per troy ounce.

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