The Dow pulled off a stunning comeback, finishing above the 10,000 mark after being down sharply for most of the day — even falling below 9,900 — amid worries about the recovery and Europe's debt woes.
The Dow Jones Industrial Average finished up 10.05, or 0.1 percent, to close at 10,012.23. Though, it ended down about half a percent for the week, marking the fourth straight decline, in which it lost nearly 6 percent.
Market pros said the gains were most likely bargain hunting as the biggest gainers were technology and materials — two of the most beaten-down sectors in the recent rout.
"It's bargain hunting in an oversold market," Cleveland Rueckert, market analyst at Birinyi Associates, told Reuters. "At least in the short term, selling was overdone."
The Nasdaq ended up 0.7 percent, led by Applied Materials, Cisco and Oracle.
Intel was the biggest gainer on the Dow, followed by Cisco and Alcoa.
Cisco actually had the most positive impact on the Dow this week, after CEO John Chambers delivered an upbeat outlook. Boeing had the most negative impact, down nearly 4 percent.
The dollar surged to its highest since May against the euro, sending both oil and gold lower. Oil dropped to around $70 a barrel before settling at $71.19, and gold hit a three-month lowaround $1,043 an ounce, before settling at $1,052.80.
The jobs report showed employers cut 20,000 jobsfrom nonfarm payrolls in January, while the unemployment rate fell to 9.7 percent.
Economists had actually been expecting payrolls to increase by 5,000 last month and for the unemployment rate to tick up to 10.1 percent.
In addition to the unexpected job loss for January, the prior five months through December were revised to show an additional 245,000 jobs were lost than previously thought, but economists said take it in stride.
"Overall, improving payroll trend continues but progress is slow," Ian Shepherdson, chief US economist at High Frequency Economics, wrote in a note to clients.
Construction, transportation and warehousing continued to report job losses, while temporary employment and retail actually added jobs.
In the day's other economic news, consumer credit fell for an 11th straight month in December, but the decline was much less than expected.
The CBOE volatility index, the market's fear gauge, spiked above 29 before settling back down around 26 amid a fresh debate about whether or not the market is entering a correction.
The recent selloff made some investors skittish, while others see an opportunity for bargains. How do you play the fear factor? Click on the video at left.
"The key ... is that most experts feel that the market is going to be a rollercoaster ride — there are going to be ups and downs," Stuart Desmond of R.W. Baird said on CNBC earlier today. "We've already had some downs, and ... I'm going to be looking for high quality that overreacted to the bad news," he explained.
There was some M&A activity this morning: Air Products and Chemicals has launched a hostile bid to buy its chief rival Airgas for about $60 per share, a 38 percent premium to Thursday's closing price. The deal is valued at about $7 billion including assumed debt.
Airgas shares surged more than 40 percent, while Air Products fell.
Two weeks after a massive recall, Toyota's president apologized to customers for safety issues with its vehicles.
"The recalls are affecting several models in several regions and have caused anxiety among customers who are wondering if their cars are OK. For that, we are sorry," said Toyota President Akio Toyoda.
Plus, more bad news for the automaker: Japan's Nikkei business daily reported that the company is planning to recall 270,000 Prius models in the U.S. and Japan to fix a braking problem.
Kodak is the big comeback story of 2010: After being left for nearly dead after it missed the digital boat, there are signs of life in this old dog. The stock hit a 52-week high this week, is up 44 percent for the year — and is showing no signs of slowing.
"We've turned bullish on Kodak," said Eric Kolb of Standard & Poor's, citing the company's cost-cutting efforts and progess in the consumer arena. "Kodak is making strong headway in areas like inkjet printers and more traditional cameras and picture frames," he said, adding that the stock's valuation is also pretty cheap — even after that 44-percent gain.
Volume was heavy today, with 12.44 billion shares traded on the NYSE, ASE and Nasdaq. Decliners outpaced advancers, roughly 17 to 13.
Next week, the earnings and economic calendars are light but we'll get several key readings on consumers, including earnings from Coke , Pepsi and Disney , the government's report on retail sales and consumer sentiment.
On Tap for Next Week:
MONDAY: Earnings from CVS Caremark and Hasbro
TUESDAY: Wholesale trade; 3-year note auction; Earnings from Coke, UBS, IAC, Pulte Homes and Disney; Mac World starts (through Sat)
WEDNESDAY: Weekly mortgage applications; trade balance; Google hearing; weekly crude inventories; Fed's Plosser speaks; 1o-year auction; Earnings from NYT, Sprint Nextedol, Boston Scientific and Prudential; Chicago auto show starts
THURSDAY: Retail sales; weekly jobless claims; 30-year auction; Earnings from Pepsi, Philip Morris, and Viacom; Fashion week starts; Miami boat show starts
FRIDAY: Consumer sentiment; Winter Olympics starts
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