NEW YORK - The stock market found little to celebrate heading into the long holiday weekend.

Major stock indexes fell more than 2.6 percent yesterday, pushing the Dow Jones industrials to their lowest level in six weeks, after the government said the unemployment rate hit a 26-year high and employers cut far more jobs than expected.

The report was especially disappointing because it broke a trend of four straight months of improvement in job losses.

The report - one of the most closely watched gauges of the economy's health - delivered the latest blow to the market's already waning confidence.

The Dow Jones industrials lost 223.32, or 2.63 percent, to 8,280.74, the lowest close since May 22.

The Standard & Poor's 500 index fell 26.91, or 2.91 percent, to 896.42, and the Nasdaq composite index fell 49.20, or 2.67 percent, to 1,796.52.

Trading on the New York Stock Exchange was extended until 4:15 p.m. Eastern time to execute customer orders affected by system irregularities, an NYSE spokeswoman said.

"There's more and more evidence mounting against this rally continuing," said Doug De Groote, a managing director at United Wealth Management L.L.C. Consumers are likely to lead the nation out of the recession, but that will not happen if more people are losing their jobs, he said.

Stocks started the day down and stayed there after the Labor Department reported that employers slashed 467,000 jobs in June, far worse than the 363,000 that economists expected and a signal that the path to recovery will be bumpy. The unemployment rate rose to 9.5 percent from 9.4 percent the month before.

Overseas markets also fell yesterday after a report showed unemployment in Europe rose to a 10-year high in May.

As stock prices fell across the board, other signs of investor unease emerged. Treasury prices rose, driving the yield on the 10-year note down to 3.50 percent from 3.54 percent late Wednesday.

Meanwhile, a gauge of volatility in the stock market, the Chicago Board Options Exchange Volatility Index, or VIX, jumped 1.73, or 6.60 percent, to 27.95 yesterday afternoon.

Consolidated volume came to a relatively low 3.56 billion shares ahead of the holiday weekend, compared with 4 billion shares traded a day earlier. Light volume can lead to more volatile swings in trading.

Markets will be closed today in observance of the Independence Day holiday.

For the week, the Dow finished down 1.9 percent; the S&P 500 lost 2.5 percent; and the Nasdaq fell 2.3 percent.

An upbeat report about May factory orders was not enough to boost traders' confidence amid the weak employment numbers. The Commerce Department said total orders rose 1.2 percent in May, better than the 0.8 percent increase that economists had expected.

Markets began the third quarter Wednesday with gains as investors found encouragement in a report showing more stable manufacturing activity and another indicating the fourth straight monthly rise in pending home sales.

Next week, the focus will shift to companies' quarterly earnings, which start Wednesday with a report from aluminum producer Alcoa Inc.

The dollar rose against most other major currencies, while gold prices fell.

The Russell 2000 index of smaller companies fell 20.25, or 3.91 percent, to 497.21.

Overseas, Japan's Nikkei stock average fell 0.6 percent. Britain's FTSE 100 fell 2.5 percent, Germany's DAX index declined 3.8 percent, and France's CAC-40 fell 3.1 percent.