New York: US stocks could face further pressure next week unless investors get some relief from worries about Europe, jobs and the toll they might take on the economic recovery.

Reports on retail sales and consumer sentiment, both of which should offer clues on the outlook for spending, are among the coming week's major economic indicators. Also on tap will be international trade data.

The impact of BP's massive Gulf Coast oil spill on the environment and the energy industry also is likely to stay in focus, with moves to contain the spill so far having failed.

The three major US stock indexes sank on Friday, with the Standard & Poor's 500 index suffering its worst percentage drop since May 20 after a disappointing US jobs report and fresh concerns that the European debt crisis was spreading.

Emotional drain

"I think we're going to take our clues from what's happening in Europe as it seems to be the emotional drain on the market," said Robert Froehlich, senior managing director of The Hartford Mutual Funds in Simsbury, Connecticut.

In addition, the S&P 500 on Friday closed at its lowest level since February, falling below 1,070 and 1,065, the intraday low from the May 6 sell-off. Both were seen as support levels by technicians.

It means "the downtrend from late April is reasserted," said Chris Burba, short-term market technician at Standard & Poor's in New York.

For the week, the Dow Jones industrial average fell 2 per cent, while the S&P 500 declined 2.3 per cent and the Nasdaq lost 1.7 per cent.

The S&P 500 is down 12.5 per cent from its April 23 closing high for the year.

The CBOE Volatility Index rose sharply as the US stock indexes tumbled on Friday. The VIX, which is Wall Street's favourite measure of investor fear, jumped 20.4 per cent to close at 35.48.

Among factors worrying investors on Friday, the US government's report showed weaker-than-expected job growth for May, with a large portion of those being temporary hirings for the US Census.

Overseas, a Hungarian official said the country was at risk of a Greek-style crisis.

"[It] is just another in a line of worries coming out of Europe regarding budget deficits and the ability to control spending," said Michael Sheldon, chief market strategist at RDM Financial, in Westport, Connecticut.

The energy sector started the holiday-shortened week with a sharp drop after yet another failed attempt to halt the oil spill in the Gulf.

By the close of trading on Friday, energy shares had lost more ground as BP said it had begun capturing oil spewing from the ruptured Gulf of Mexico well. But tar balls washed up ashore in Florida and the political heat on BP increased as Washington and investors pressed for the British company to free up cash to take care of the damage.

In another blow, US crude oil futures fell 4.2 per cent, or $3.10, to settle on Friday at $71.51 a barrel as the US payrolls data and Europe's bank woes stirred worries about economic recovery and energy demand.