Wall Street turned in a mixed performance Friday as investors set aside some initial enthusiasm over a stronger-than-expected employment report to lock in some of their recent gains.
Blue-chip stocks logged their third weekly advance in a row as investors grew more confident about the economy's ability to outrun a deep downturn.
Reports on employment and the pace of orders at factories offered the market fresh evidence that the economy might not be in as worrisome a state as many had feared. But a surprise quarterly loss from Sun Microsystems weighed on the tech-laden Nasdaq composite index.
Still, buyers outnumbered sellers after a government report showed the nation's employers cut far fewer jobs than expected last month, stirring optimism about the buoyancy of the economy.
Dave Rovelli, managing director of U.S. equity trading at Canaccord Adams, said stocks pulled back from the day's highs because many investors opted to hold on to gains after a recent run-up, including a 190-point surge in the Dow Jones industrials Thursday.
"This is just normal profit-taking," he said, adding: "Sun Microsystems' earnings today didn't help the cause."
The employment report Friday came at the end of a crucial week for Wall Street. Although corporate results dominated in previous weeks, investors focused this week on the Federal Reserve's decision Wednesday to lower interest rates and on reports on the nation's gross domestic product, personal spending and factory orders.
The Fed's decision to lower the benchmark federal funds rate by a quarter of a point to 2% and widespread speculation that it will stand pat at future meetings boosted investors' confidence. The Fed's comments helped shore up an anemic dollar and calmed some fears about inflation.
The Dow Jones industrial average rose 48.20 points Friday, or 0.4%, to 13,058.20 after being up more than 100 points early in the session.
Broader stock indicators ended mixed. The Standard & Poor's 500 index rose 4.56 points, or 0.3%, to 1,413.90, while the Nasdaq slipped 3.72 points, or 0.2%, to 2,476.99.
The activity Friday came a day after a rising dollar and falling oil prices emerged as promising signs for the economy. The Dow closed above 13,000 for the first time since Jan. 3.
For the week, the Dow gained 1.3%, while the S&P; 500 added 1.2% and the Nasdaq rose 2.2%. It was the third straight weekly advance for the Dow and the S&P; 500.
Richard Sparks, a senior analyst at Schaeffer's Investment Research, noted that on Thursday and Friday the S&P; 500 closed over the 1,400 mark for the first time since January.
"If we're able to continue above it, or if the S&P; 500 is able to hold on to that level, that's going to be a big positive for the market," Sparks said.
"We've had several good weeks running here so it doesn't surprise me at all to see a little bit of a sell-off," he said of Friday's session.
Bond prices declined Friday as some investors moved into stocks from the safety of government debt. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.86% from 3.76% late Thursday.
Light, sweet crude rose $3.80 to settle at $116.32 a barrel on the New York Mercantile Exchange. The dollar was mixed against other major currencies, with the euro dropping 0.004 to $1.542. Gold prices rose $7.20 to $856.10.
Recent months have brought surges in food and energy costs that have made it harder for many consumers. Wall Street is concerned that rising prices and a weak housing market would force consumers, who account for about 70% of U.S. economic activity, to curtail spending.
But with oil prices pulling back sharply Thursday, stocks took off, and they continued their run into Friday's session before the rally stalled. Rovelli said investors apparently felt the recent run-up had occurred too quickly.
"The environment is not that great," he said, referring to energy prices that remain elevated even off their highest levels. "We're overbought. We were overdue for some profit taking."
The Labor Department's report that employers cut a net 20,000 jobs in April was a relief to Wall Street, which had been expecting payrolls to fall by 75,000 jobs.
The unemployment rate fell to 5% from 5.1%. This marked the fourth straight month of job losses, but the data signaled that perhaps the economy might be resisting falling into recession.
A separate report showing that factory orders increased in March after two months of declines added to an upbeat mood. The Commerce Department said U.S. manufacturers saw orders increase 1.4% in March. Economists expected a 0.2% increase after declines in January and February.
Sun Microsystems fell $3.69, or 23%, to $12.64 after the company stunned investors late Thursday by reporting a loss for the third quarter. The server and software maker blamed the loss on sagging sales to U.S. companies focused on consumers, who Sun said were delaying big-ticket spending.
Advancing issues outnumbered decliners by about 3 to 2 on the New York Stock Exchange.
The Russell 2,000 index of smaller companies fell 4.01 points Friday, or 0.6%, to 725.74 but finished the week up 3.86 points, or 0.5%.
Overseas, Japan's Nikkei stock average rose 2.1%. Britain's FTSE-100 finished up 2.1%, Germany's DAX index added 1.4% and France's CAC-40 rose 1.5%.