The last time the Dow fell this much was at the beginning of the subprime mortgage crisis in February 2007.

Image Traders working in the energy options pit on the floor of the New York Mercantile Exchange on Friday. Credit... Spencer Platt/Getty Images

On Friday, the blue-chip index was dragged down by shares of American International Group, the big insurer, which stumbled after accusations that the company may have overstated the value of contracts tied to subprime mortgages.

A.I.G.’s shares fell $2.48, or nearly 7 percent, to close at an 11-year low of $33.93.

Shares of financial firms and companies that depend on discretionary spending were the hardest hit, as investors worried that the weak labor market was likely to raise anxieties among some Americans and put a pall on spending habits.

Friday’s report from the Labor Department said that the economy lost jobs for the fifth consecutive month and the unemployment rate surged to 5.5 percent in May, from 5 percent in April, the sharpest monthly rise in 22 years.

Investors are also worried that high energy prices will further slow the economy.

“If oil prices stay this high, you’re going to have to re-examine your estimates for G.D.P., inflation and consumers’ ability to spend outside of nondiscretionary items,” Ms. Krosby said. “This has all of the elements of an investor’s worst-case scenario.”

Oil prices surged almost 8 percent, to $138.54 a barrel after a senior Israeli politician raised the specter of an attack on Iran and the dollar fell against the euro.

“As soon as that news hit the tape, oil spiked about $6,” said David Kovacs, an investment strategist at Turner Investment Partners.