Stocks raced higher today after the government's employment report calmed fears about rising inflation and prompted a broad rally that included the biggest point gain in the history of the Nasdaq composite index.

The Dow Jones industrial average rose 235.24 to close at 11,078.45. The Dow ended an extremely volatile week with a loss of 11.72, or 0.1 percent.

The Nasdaq rose 108.87, to 2843.11, surpassing the previous record for a one-day point gain, 103.16, set on June 16. With today's gain, the index got within sight of its record close of 2864.48, reached July 16.

The Standard & Poor's 500-stock index rose 38.13, to 1357.24.

Stocks soared after the Labor Department reported that employers added 124,000 jobs to their payrolls in August, fewer than most economists expected.

The report also showed that average hourly earnings, a key gauge of inflation pressures, rose just 0.2 percent in August, a 3.5 percent increase from a year ago.

Both figures helped ease fears that the economy is overheating and the Federal Reserve's Open Market Committee will have to raise interest rates for a third time this year.

Bond prices also rose on the employment report, pushing yields on 30-year Treasuries down to 6.01 percent, from 6.13 percent late Thursday. The bond's price rose $15.31 per $1,000 in face value. The yield decline provided a strong boost to stocks, which tend to tumble when bond yields are rising and becoming a more attractive investment.

Financial issues, the most sensitive to interest rate changes, surged. J.P. Morgan, up 7 7/8 to 133-13/16, and American Express, up 6 1/8 to 142, were the Dow's biggest gainers. Technology stocks, which dominate the Nasdaq, also rallied. Microsoft rose 4 to 95-13/16, extending its robust gains of the past week. Yahoo soared 13-7/16 to 155, and online auctioneer eBay jumped 12-9/16, to 134.