NEW YORK – Stocks rose sharply Friday as upbeat jobs data and a reassuring revenue forecast by chip giant Intel (INTC) soothed investor jitters about the weak economy and corporate profits.
The tech-heavy Nasdaq Composite Index climbed 44.29 points, or 3.54 percent, to 1,295.29. The tech-packed index virtually erased the loss it took on Thursday when it closed at its lowest level in a month. The blue-chip Dow Jones industrials rose 143.5 points, or 1.73 percent, to 8,427.20, while the broad Standard & Poor's 500 rallied 14.77 points, or 1.68 percent, to 893.92.
For the week, the Dow was off about 2.7 percent, the Nasdaq lost 1.49 percent and the S&P 500, was down 2.4 percent.
"Today's numbers were a nice positive and combine that with a midquarter update from Intel that was not as bad as expected and you get a relief rally," said Joe Seminara, head of trading at Dreyfus Corp.
Still, many market watchers regarded the rally as a short-term blip, believing stocks had hurdles to overcome. Worries are mounting about the possibility of a U.S. military attack on Iraq, and the anniversary of the Sept. 11 attacks that devastated Wall Street looms next week.
The U.S. unemployment rate eased to a five-month low of 5.7 percent in August, while payrolls grew more than expected, the government said, suggesting the economy is crawling forward. The news calmed fears that the fragile U.S. economy could slip back into recession.
Intel jumped 7.35 percent after the world's No. 1 chipmaker trimmed its quarterly revenue forecast, but not by as much as many investors had feared.
"Today's numbers were a nice positive and combine that with a mid-quarter update from Intel that was not as bad as expected and you get a relief rally," said Joe Seminara, head of trading at Dreyfus Corp.
Oil stocks like Exxon Mobil Corp. (XOM) also lifted the market as oil prices hit their highest level in a year on growing fears of a U.S. strike against Iraq.
Trading was moderate, with about 1.2 billion shares traded on the New York Stock Exchange and about 1.3 billion shares changing hands on Nasdaq.
Major market gauges, however, were lower for the four-day trading week that was shortened by the Labor Day holiday on Monday, and many Wall Street experts said the market still had hurdles to overcome. For the week, the S&P 500 was down 2.4 percent, the Dow was down 2.7 percent, and the Nasdaq Composite was down 1.5 percent.
Worries are mounting about the possibility of a U.S. military attack on Iraq, and the anniversary of the Sept. 11 attacks that devastated Wall Street looms next week.
Questions still swirl around the health of the economy and corporate profits, and high oil prices, while good for oil companies, could raise costs for consumers and corporate America and could hinder the economy's comeback.
"I still think the general tone of the market is to be cautious," said James Park, senior equity trader at Brean Murray & Co.
Still, Wall Street wrapped up a week of wild swings on a bright note, led by gains in the technology sector. Treasury prices snapped a week-long rally as investors ventured back into the stock market.
Intel rose $1.11 to $16.22, ranking as the largest percentage gainer on the Dow and the most active share on Nasdaq. Intel's better-than-expected outlook helped it claw back some of the 10 percent it lost this week on fears it would drop a bombshell during its financial update on Thursday.
Lehman Brothers raised its investment rating on Intel to "equal-weight" from "underweight," saying newly lowered expectations for the chipmaker should be attainable.
Intel helped spark a rally in other chip and chip equipment stocks. The Philadelphia Stock Exchange semiconductor index rose nearly 5 percent. Applied Materials Inc.(AMAT), the leading maker of chip production equipment, rose 87 cents to $12.94. Chip gear maker KLA-Tencor Corp. (KLAC) jumped $2.08 to $32.04.
Computer hardware, software and services vendor CDW Computer Centers Inc. (CDWC) surged $5.17, or 12 percent, to $46.47. The company raised its revenue and earnings guidance for the third quarter, citing strong sales of Microsoft Corp. products.
Another bright spot was DuPont Co. (DD), which lifted the Dow with a gain of $1.92 to $39.17 after Bear Stearns raised its rating on the chemical company's shares, citing a belief that its earnings will "hold together."
Exxon helped the Dow with a gain of 54 cents to $34.31. Oil prices peaked above $30 a barrel on Friday amid fears of a full-scale U.S. attack on Iraq. The American Stock Exchange's oil index was up nearly 2 percent.
Retailers recovered from a beating on Thursday. Circuit City Group (CC), the No. 2 U.S. consumer electronics chain, rose $1.48 to $15.73 after it reported that quarterly sales at stores open at least a year rose 10 percent. Rival and industry leader Best Buy Inc. (BBY)surged $2 to $24.
Pfizer Inc.(PFE), the world's largest drugmaker, fell $1.18 to $30.75 and topped the Big Board's most active list. The company said it would delay seeking regulatory approval for its new epilepsy and anxiety drug while it completes studies relating to the drug's safety.
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 Europe, 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.
Reuters and the Associated Press contributed to this report.