NEW YORK (MarketWatch) — U.S. stocks fell sharply, after heavy selling in momentum stocks such as biotechs and Internet companies on Friday reversed an early rally, sending the Nasdaq Composite to its worst day in two months.

The markets opened higher following a government report showing a steady pace of jobs growth, lifting both the S&P 500 and the Dow Jones Industrial Average to intraday highs. But early gains soon dissipated.

The Nasdaq Composite COMP, -1.07% fell 110.01 points, or 2.6%, to 4,127.73. Friday’s losses resulted in a second weekly loss in a row. Biotechnology and Internet stocks were the worst hit. The iShares Nasdaq Biotechnology ETF IBB, +0.50% , a benchmark for that sector, fell 4%. Shares in Apple Inc. AAPL, -3.17% , Nasdaq’s heaviest weighted component, were down 1.3%. Facebook Inc. FB, -0.89% , considered a momentum play, tumbled 4.6%. The stock is now in bear market, having fallen more than 20% from its all-time closing high set on March 10.

The S&P 500 SPX, -1.11% ended the day 23.68 points, or 1.3%, lower at 1,865.09. The benchmark index eked out a 0.4% gain over the week. Technology and consumer discretionary sector stocks led the losses, while investors piled into the defensive utilities sector, the only one closing higher.

The Dow Jones Industrial Average DJIA, -0.87% dropped 159.84 points, or 1%, to 16,412.71 but managed to stay 0.5% higher on the week. Microsoft Corp MSFT, -1.24% and Visa Inc V, -1.29% , down 2.8% and 3.4% respectively, were leading the losses among the blue chips.

“We are seeing a key reversal, significant retrenchment in risk in equity markets. For days we saw equities going higher while gold and oil drifted lower and now this trend has reversed,” said Colin Cieszynski, senior market analyst at CMC markets.

“Traders are stepping back from the highflying stocks like Tesla and Facebook, which is a bearish indicator. This is a sign that this rally is tired and is in need of a pullback,” 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 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.

Amazon.com, Pandora, Tesla in bear territory

Among individual stocks, shares in so-called momentum high-growth stocks dropped sharply, sending some of them into bear territory. Telsa Motors, Inc TSLA, +4.42% fell 5.9%, Pandora Media, Inc US:P fell 4.9%, Amazon.com, Inc AMZN, -1.78% fell 3.2%.

One of the bright spots today, GrubHub Inc. GRUB, +0.61% shares rose 31% in their market debut.

Mylan Inc MYL, -2.66% shares rose 1.5% 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, +0.07% shares fell 4.2% after fourth-quarter results fell short of Wall Street forecasts.

Shares of Anadarko Petroleum Corp. US:APC rose 2.1%, 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, their ninth-straight gain. Stocks in Asia closed out mostly higher, though gains were muted ahead of the U.S. data. Gold GCM24, moved higher, along with oil CLK24, , while the dollar fell against the Japanese yen after the jobs report.

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