in 1rst gear with motor off i can freely move my bike approximately 8 inches back and forth is this normal also jerks at slow speed and makes a clunking sound as if a universal joint was bad in a car

 

Movement as you speak of will usually be found in most bikes to some degree depending on the tension (adjustment) of the primary chain.

The jerking you speak of will also be worse when the primary chain needs an adjustment (too loose)

The clunking sound could also be the primary chain slapping in the case. Check that out and adjust the chain as it can raise heck with the sprokets in the case when it is too loose.