Stocks overcame a volatile start today to close sharply higher as investors shrugged off worries about inflation and turned their focus to positive earnings news expected next week.
The Dow Jones industrial average rose 112.71 points, to 10,649.76. The blue-chip index was up 376.76 points for the week.
Broader stock indicators also moved higher. The Standard & Poor's 500-stock index rose 18.38, to 1336.02; and the Nasdaq composite index gained 25.87, to 2886.57. All three indexes had their best weekly gains since the week ended July 2.
Falling oil prices and some bargain hunting helped power the market's rally. In addition, investors were anticipating strong earnings reports when many companies release third-quarter results next week.
These factors helped lift stocks from an early morning slump caused by uncertainty over the government's employment report and whether it indicated that inflation was accelerating.
Instead of technology and Internet shares, which have led the market in recent months, there was lots of buying of big names in other sectors, namely consumer, drug and transportation stocks.
"Right now, we are seeing a rapid rotation in the market," said Alan Ackerman, senior vice president at Fahnestock.
The small-cap stocks, however, lagged behind the broader market. That was reflected in the performance of the Russell 2000 index of smaller companies, which fell 0.40 to 427.71.
Johnson & Johnson led the Dow higher, climbing 4 1/2, to 98 3/4.
Other gainers included American Express, up 3-3/16, to 149-11/16; Wal-Mart, up 4-1/16, to 55 3/8; and General Electric, up 2 7/8, to 124 3/4.
Xerox was one of the biggest losers in the market, falling 10 1/2, to 32 1/4, after it warned that third-quarter earnings will be lower than analyst expectations.
A slump in oil prices hurt oil company stocks, including Atlantic Richfield, which fell 3-13/32, to 85-9/16, and Royal Dutch Shell, which slid 1-3/16, to 57-15/16.