The Dow crossed the psychologically important 11,000 mark as investors anticipated the weak jobs report will prompt the Federal Reserve to spur economic growth.
The Dow Jones Industrial Average rose about 50 points. While it slipped back below 11,000, it reached that level Friday morning for the first time since May 4. The highest close for the Dow this year was on April 26, when the Dow reached 11,205.
Alcoa and Caterpillar rose, while Verizon and Kraft fell.
The S&P 500 and the Nasdaq rose. The CBOE Volatility Index, widely considered the best gauge of fear in the market, fell to above 21.
Materials, consumer discretionary and industrials sectors rose, while telecom fell.
The U.S. dollar was down slightly against a basket of currencies on Friday, while gold continued to rise.
U.S. nonfarm payrolls fell 95,000 last month, more than expected, mainly due to the loss of government jobs. Private sector jobs rose by 64,000, less than expected. The unemployment rate remain unchanged at 9.6 percent.
Some traders believe the weak report increases the possibility the Federal Reserve will pump more money into the financial system—known as quantitative easing—to help spur growth after a weak jobs report.
"The twisted irony is this should be perceived as a negative, but Wall Street is banking on heavy Fed involvement to help push stocks higher for the rest of the year," said Todd M. Schoenberger, managing director LandColt Trading.
"The issue isn’t if the Fed is going to make a move, but how much," Schoenberger said.
Most market participants believe the Fed will buy $500 billion in assets, he added. That would lead to a 0.5 to 1.5 percent increase in GDP, ensuring GDP will hit the important threshold of 2.5 percent to maintain a level rate of employment.
"Clearly that will help the economy recover," Schoenberger said. "Any number south of that, you’ll have a problem."
One piece of bad news in the employment data was the rise in private payrolls was due to increases in two areas: services and health care, said Doug Roberts, chief investment strategist at Channel Capital Research.com.
"If all job growth is coming out of that, it doesn’t speak well to a robust economy," Roberts said.
The data not only increases the likelihood the Fed will act, it increases the possibility Republicans will win big in November, Roberts said. More Republicans in Congress is likely to create grid-lock, which markets tend to prefer, since it means less change.
Shares of Alcoa soared after the aluminimum producer reported third-quarter profit rose above Wall Street expectations after the bell on Thursday. Alcoa also issued an upbeat outlook, raising its forecast for global aluminum demand this year to 13 percent from 12 percent.
Hedge-fund manager Pershing Square Capital Mangaement has reportedly bought an 11 percent stake in Fortune Brands , as well as 16.5 percent stake in JP Penney. Both stocks soared on the news.
Netflix shares were lower after speculation an initial public offering for Hulu could raise $200 million to $300 million.
In the tech sector, KLA-Tencor and Applied Materials fell after reports the semiconductor equipment makers were downgraded by Deutsche Bank. The brokerage also reportedly downgraded the Semicap Equipment sector to "sell," saying fundamentals of the business were weakening.
Amazon.com will open an applications store that runs on Google's mobile Android platform, the Wall Street Journal reported.
Amazon.com's entry into the mobile-applications marketplace would open a new battlefield with Apple, the paper said.
Bank of America raised its price target for Apple to $400 a share from $360, while Oppenheimer raised its price target to $345 from $330, and said it would buy the stock ahead of fourth-quarter earnings.
Shares of Motorola, meanwhile, fell after Citigroup cut the telecom company to "hold" from "buy."
Among financials, Bank of America was higher after announcing it would halt foreclosures in all 50 states. Also, PNC Financial said it would stop sales of foreclosed homes in 23 states for 30 days, according to the New York Times.
An expected decline in corn stocks due to weather conditions over the summer was putting pressure on feed stocks, including Smithfield Foods, Pilgrim's Pride and Tyson Foods .
Schlumberger shares were slightly higher despite news the U.S. Department of Justice has started an investigation into whether oilfield service provider Schlumberger paid bribes to a consulting firm that had ties with Yemen's government, The Wall Street Journal reported.
Shares of Coca-Cola and Pepsi were both slightly lower after Coke was reinstated as a "buy" and Pepsi was removed from the "conviction buy" list at Goldman Sachs.
In M&A news, Sanofi-Aventis, dismissed suggestions by bid target Genzyme that it had opened the door to paying a higher price for the US biotech company.
In other economic news, wholesale trade was up 0.8 percent in August, more than expected.
In other economic news, investors will be looking out for remarks by policymakers at a meeting of IMF/G7 officials which starts on Friday and will address rising tension over currency policies.
Hours before the gathering kicked off, Japan’s finance minister warned that the country will continue to intervene in foreign exchange marketswhen deemed necessary. The Japanese authorities, who are worried a strong yen will hit the country’s export sector, intervened in the market for the first time in six years last month.
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