Stocks rebounded Friday after a report on the nation's unemployment showed unexpected improvement, and Intel predicted third-quarter chip sales would fall less than analysts had anticipated.
The Dow Jones industrials climbed more than 150 points, erasing a sharp decline Thursday attributed to bad economic news -- including sluggish productivity growth and disappointing retail sales.
"The situation overall, while not terrific, is better than some had feared," said Brian Bush, director of equity research at Stephens Inc.
Friday's gains capped a tumultuous week on Wall Street, with the Dow alternating triple-digit winning sessions with triple-digit losing sessions.
Despite the rally, the major indexes ended the week lower.
For the week, the Dow fell 2.8 percent, the Nasdaq composite index lost 1.5 percent and the Standard & Poor's 500 index declined 2.4 percent.
"Investors just can't seem to make up their minds," said Brian G. Belski, market strategist at US Bancorp Piper Jaffray Inc. in Minneapolis. "Volatility continues to reign supreme."
The Dow rose 143.50 points, or 1.7 percent, to close at 8,427.20. It dropped 141 points on Thursday.
The broader market also moved higher.
The Nasdaq rose 44.29 points, or 3.5 percent, to 1,295.29. The S&P 500 gained 14.77 points, or 1.7 percent, to 893.92.
Driving Friday's increases was a government report showing that the nation's unemployment rate fell to 5.7 percent in August and companies added 39,000 new jobs, the fourth consecutive monthly increase.
Analysts had expected the rate to stay at 5.9 percent or edge up slightly for August.
Stock prices rallied during the first three weeks of August, but largely have fallen back since then.
With consumer confidence still fragile and businesses cautious about capital spending, analysts said the market remains susceptible to further volatility and declines.
It will take a string of positive news, analysts said, for stock prices to move steadily higher.
For the time being, "it's going to be a very bumpy ride," said Brian Bruce, director of global investments at PanAgora Asset Management Inc. in New York.
Low interest rates have helped sustain the housing and automobile markets, but retailers and airlines continue to experience difficulties. With so much conflicting data, Bruce said investors likely are to take their cues on any given day from the latest economic indicator or headline-grabbing news.
Shares of Intel Corp. rose $1.11, or 7.4 percent, to $16.22, after the chip maker lowered its third-quarter sales estimates late Thursday -- but not by as much as Wall Street had feared.
Shares of Advanced Micro Devices Inc., a rival, rose 5 cents, to $8.04.
Vivendi Universal SA got a boost after The Wall Street Journal, citing unnamed sources, reported that the company was in talks to sell its publishing unit for $3 billion to $5 billion.
Vivendi shares were up $1.63 each, or 14.4 percent, to $12.99.
However, R.J. Reynolds Tobacco Co. fell sharply after the company lowered its earnings forecast for the third quarter. Its shares declined $4.72, or 7.9 percent, to $52.58.
Advancing issues outnumbered decliners by about 7 to 3 on the New York Stock Exchange, where volume was light.
The Russell 2000 index, the barometer of smaller-company stocks, gained 10.51 points, or 2.8 percent, to 391.57.
Overseas, Japan's Nikkei stock average finished Friday down 1 percent.
In European trading, Germany's DAX index was up 3.9 percent, France's CAC-40 rose 3.4 percent and Britain's FTSE 100 gained 2.4 percent.
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