Stocks retained most of their gains after a choppy start, closing the week on a positive note.
The Dow Jones Industrial Average finished higher. Nasdaq and the S&P 500 also gained ground.
A strong November payrolls report and weakness in consumer sentiment caused stocks to see-saw through much of the day. Analysts believe this volatility likely will continue.
"The data has been decidedly negative and those who follow that think that the market should be headed down as a result of the deteriorating data in the economy," Kevin Caron, Market Analyst at Ryan Beck, told cnbc.com. "On the other hand, someone who's looking at the market from a very long-term perspective and looking at the market as one asset class compared to others, may very well conclude that stocks are cheap."
On the New York Stock Exchange, decliners led advancers 1,650 to 1606 with 160 stocks unchanged. A total of 198 stocks hit 52-week highs. On Nasdaq, decliners led advancers 1,485 to 1491 with 172 stocks unchanged. Ninety-one issues reached new highs.
For the week, the Dow was up 0.93% the S&P climbed 0.94% and the Nasdaq rose 1%.
Even though the Dow has risen by more than 14% year-to-date and the S&P 500 is up more than 12% this year, some traders aren't worried about a December downside surprise.
"I think we're going to close the end of the year above 12,000," said Doreen Mogavero, President of Mogavero, Lee & Company, appearing on CNBC's "Squawk on the Street." "That is down several hundred points from where we are now. You can call that a correction if you want, but I don't think it's going to be that dramatic."
The Federal Reserve will meet next week for the last time this year. Expect even more volatility as managers begin to adjust their portfolios for end-of-year tax purposes.
Caron believes the markets will be weaker near-term but he remains positive on stocks longer term. Others believe there is enough underlying strength in the market to keep investors interested into the New Year.
In an exclusive interview with CNBC's Maria Bartiromo, U.S. Treasury Secretary Henry Paulson said China must move quickly to complete reforms of its economy to remain competitive. Following the interview, the dollar rose against the Euro, pound and the yen.
“On a short-term basis, we need more flexibility (on currency),” Paulson told CNBC. “But obviously, on an intermediate term basis, (the Chinese) need to have a currency where the value is set in a competitive market place. That’s what every other major participant in the economic system has. China is unable to do that now and they will be unable to do it until they open up their capital markets. They need capital markets that work...and the only way they’re going to be able to get to that point is to open then up to competition and foreign investment.”
Shares of Dow component 3M came under pressure following a downgrade to neutral from overweight at Prudential Equity Group. Prudential believes it may take more time for the stock to regain its valuation premium due to investor concerns about slowing economies in Europe and North America.
Shares of Dow component McDonald's rose after the fast-food company said November same-store sales rose 6.2% over year-earlier levels.
In the oil market, New York light crude futures rose above $63 a barrel, but OPEC is not likely to cut production when it meets next week in Nigeria if prices remain above $60 per barrel, The Wall Street Journal reported. ExxonMobil fell. Gasoline and heating oil futures rose, but natural gas fell about one cent.
Cititroup gained on speculation of a restructuring. The company denied the reports. Band of America rose on reports that an investment analyst told clients it may be interested in bidding for the London-based bank, but closed the session down.
Europe Closes Lower
London's FTSE-100, the DAX in Frankfurt and the Paris CAC-40 rose on the U.S. jobs report, then sank into negative territory.
On the corporate front, music company EMI is very close to a deal to be acquired by private equity company Permira Advisers, The Wall Street Journal reported. Shares of EMI rose 1.25% in London trading.
Shares of U.K. bank Barclays rose on speculation that it may be bought by Bank of America . Bank of America is "very interested in acquiring Barclays" and a takeover would help Bank of America achieve its global expansion goals, Merrill Lynch said in a research note today.
Tokyo Struggles, Seoul Falls Sharply
It was a bumpy Friday for markets in Asia, with Seoul closing sharply lower. Japan and Australia also finished lower. The only bright spot in the region is Singapore where stocks were bucking the trend and setting new market highs.
South Korea's Kospi Index closed sharply lower as investors dumped shares of exporters and shipbuilders on concerns over the strong local currency. The South Korean won rose by as much as 1% against the U.S. dollar during trade, with dealers citing heavy dollar-buying intervention from the start of the day's local session.
Tokyo's Nikkei 225 Average closed lower after a downward revision of third-quarter growth in Japan and data showing a weaker-than-expected 2.8% rise in private-sector machinery orders in October, casting doubt on views that the Bank of Japan will
raise interest rates this month.