US stocks finished with substantial weekly losses as investors remained concerned about vanishing jobs and worsening corporare profit outlook.

For the week, Dow was down 435.51 points or 4.82%. S&P dropped 41.45 points or 4.44%, while Nasdaq Composite settled with a weekly loss of 60.62 points or 3.71%.

The damage from the deepening recession was visible in economic data. On Friday, a Labor Department release showed the US economy lost 524,000 jobs in December, worse than 500,000 job losses expected by economists. Almost 2.6 million jobs were lost in 2008 as recession deepened and forced the companies to resort to cost cutting measures, including layoffs. The unemployment rate shot up to 16 year high of 7.2% in December from 6.8% in November. Economists had predicted the rate to rise to 7%. Thursday’s jobless data was largely mixed. According to Department of Labor, number of Americans filing first- time claims for unemployment benefits dropped by 24,000 to 467,00 in the week ending Jan. 3. Economists had forecast jobless claims to rise to 545,000. The four-week average of seasonally adjusted initial jobless claims, a less volatile gauge, decreased by 27,000 to 525,750. However, continuing claims for the week ending Dec. 27 jumped 101,000 to 4.61 million, a 26 year high. Earlier, on Wednesday ADP survey reported that a total of 693,000 private-sector jobs were lost in December, worse than the forecast of 450,000. A report by National Association of Realtors showed US housing slump worsened in November as pending home sales Index plunged 4% to 82.3, the lowest level since the series began in 2001. U.S. Census Bureau on Tuesday said new orders for manufactured goods fell for the fourth straight month in November. Separately, Institute for Supply Management said on Tuesday that services sector contracted less than expected in December. The ISM Services index rose to 40.6% in December from record low of 37.3% in prior month.

Alcoa's announcement of massive job cuts also heightened concerns about the employment picture. Late on Tuesday, the largest US aluminum producer said that it will cut 13,500 jobs and reduce production by 18% due to continued slump in demand and prices of metal. On Friday, Boeing Co. (NYSE: BA) also announced that it would cut 4,500 jobs or 7% of its commercial airplane staff in 2009. Dell Inc. (NASDAQ: DELL) said on Thursday that it will cut 1,900 out of 3,000 jobs at its manufacturing plant in Limerick, Ireland and will shift production to Europe, the Middle East and Africa as part of its cost-cutting drive.

Meanwhile, President-elect Barack Obama once again urged the new Democratic-controlled Congress to quickly approve the stimulus plan in order to counter deepening recession. Obama said in a statement "The economy is very sick. The situation is getting worse. ... We have to act and act now to break the momentum of this recession. I expect to be able to sign a bill shortly after taking office. When questioned on the timing, he said, "By the end of January or the first of February." Obama is also understood to have told House Speaker Nancy Pelosi that he favors a price tag of about $775 billion for the U.S. economic stimulus package.