The Dow closed above 11,000 for the first time since early May on hopes the Federal Reserve will step in to spur economic growth.
The Dow Jones Industrial Average rose 57.90 points or 0.5 percent, on Friday, and 176.80 points or 1.6 percent for the week, to close at 11,006.48. It was the first time the blue-chip index closed above the psychologically significant 11,000-level since May 3. The first time the Dow closed above 11,000 was eleven years earlier, on May 3, 1999.
The highest close for the Dow this year was on April 26, when the index reached 11,205, 1.8 percent higher than Friday's closing price.
Alcoa was the best performing stock on the Dow this week, rising 5.4 percent, while American Express was the worst, losing 9.1 percent.
The S&P 500 rose 7.09 points, or 0.6 percent on Friday, and 18.91 points, or 1.7 percent for the week, to close at 1,165.15.
JC Penney was the best performing stock on the S&P 500, rising 18.4 percent for the week, while Coca-Cola was the worst, plunging 29.1 percent.
The Nasdaq rose 18.24 points, or 0.8 percent, on Friday, and 31.16 points or 1.3 percent. for the week, to close at 2,401.91. The CBOE Volatility Index, widely considered the best gauge of fear in the market, fell near 20.
Materials, energy and consumer discretionary sectors rose, while telecom fell.
The dollar fell sharply against the euro and yen, while gold prices continued to rally above $1,345 an ounce.
Private employers added 64,000 workers last month, short of the 75,000 economists expected, according to government reports. Overall, 95,000 jobs were slashedand the unemployment rate held steady at 9.6 percent in September. Economists polled by Thomson Reuters were expecting it to rise to 9.7 percent.
Some traders believe a weak jobs report increases the possibility the Fed would pump more money into the financial system—known as quantitative easing—to help spur growth.
"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 Schoenberger, managing director LandColt Trading. "The issue isn’t if the Fed is going to make a move, but how much."
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.
In a Friday research note, Bank of America Merrill Lynch said the Fed is likely to announce a "flexible program," that would begin with an initial purchase of $500 billion over six months, but more buying could take place after that, if needed.
"The communication will be key," the research note stated. "The language should tie continued buying to the Fed's inflation objectives. We do not expect the Fed to explicitly announce an inflation target, but we do expect it to be clear that the Fed is committed to 1.5% - 2.0% core inflation."
One piece of bad news in the employment data was the rise in private payrolls was due to increases in just 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.