updated 11/5/2007 9:54:19 AM ET 2007-11-05T14:54:19

Wall Street twisted its way through another difficult session Friday, discouraged about the economy's prospects but still managing a higher finish after some concerns about the beleaguered financial sector lifted late in the session. The major indexes ended the week mixed.

Major Market Indices

Word shortly before the close that Citigroup Inc.'s board plans to meet in an emergency session over the weekend helped that stock and other financials pare steep losses.

Friday's session ended a week made turbulent not only by bad news from the financial sector but also by spiking commodity prices and hints from the Federal Reserve that it might be less generous with interest rate cuts in the coming months. A highly anticipated Labor Department report Friday showed employers added 166,000 jobs in October — the most in five months and nearly double what analysts expected — but didn't give stocks much of a lift a day after a sharp pullback as investors' unease about the financial sector blanketed trading.

Wall Street remained shaky after Thursday's sharp pullback, which took the Dow Jones industrial average down more than 360 points — the fourth biggest drop of the year. The market has been mercurial lately, with economic data coming in mixed and the possibility of interest rate cuts ending, and Friday's trading saw the major indexes alternating between gains and losses.

"I think there is a lot of uncertainty in the markets about the financial institutions in particular," said Subodh Kumar, global investment strategist at Subodh Kumar & Assoc. in Toronto. "This market will remain volatile until these issues are resolved or until it's had a full 10 percent correction," he said, referring to unease about the extent of write-downs.

The Dow rose 27.23, or 0.20 percent, to 13,595.10 after being down more than 120 points earlier in the session and fluctuating between gains and losses.

Broader stock indicators also closed higher. The Standard & Poor's 500 index rose 1.21, or 0.08 percent, to 1,509.65, while the Nasdaq composite index rose 15.55, or 0.56 percent, to 2,810.38.

The Dow and the S&P 500 ended the week with losses, the Dow dropping 1.53 percent and the S&P off 1.67 percent. The Nasdaq managed a gain of 0.22 percent.

Bond prices rose as investors pulled more money out of stocks. The yield on the 10-year Treasury note, which moves opposite the price, fell to 4.32 percent from 4.35 percent late Thursday.

Oil prices rebounded on the New York Mercantile Exchange, after dropping sharply Thursday. Prices have been exceptionally volatile in recent days as the market treads through record territory. A barrel of oil settled up $2.44 at $95.93 per barrel.

The dollar traded mostly lower against other major currencies. The euro bought a record $1.4527 on Friday.

Some of the biggest losers in the stock market Friday, as they have been in the past few months, were financial institutions — including Merrill Lynch & Co., Washington Mutual Inc., Goldman Sachs Group Inc. and JPMorgan Chase & Co. Several analysts have issued research notes in recent days expressing concern about banks' and brokerages' exposure to the tight credit markets and the likelihood that further write-downs are in the offing.

It's likely that as strong as the jobs number was, investors will need to see more evidence of a stronger economy and more stability in the credit markets before they can make any major commitments to stocks, observers said.

The market on Thursday was unnerved by news that consumers cut back their spending in September and that the manufacturing sector expanded in October at the slowest pace since March. But earlier in the week, an initial estimate of third-quarter economic growth came in stronger than economists had expected, at 3.9 percent.

The economic news that arrived Friday added to the mixed picture. The unemployment rate held steady at 4.7 percent, in line with September and analysts' consensus forecast. And while the increase in jobs was well above what economists polled by Thomson/IFR had expected, the size of the civilian labor force shrank.

Jack Ablin, chief investment officer at Harris Private Bank, contends investors were downplaying an upbeat jobs figure and that the decrease in the labor force should be a lesser concern.

"I think investors who are worried about the direction of the economy should take comfort that we still have an engine," he said, referring to the overall employment picture. "We know we can't rely on the consumer to keep spending the way that they have but we can point to job growth and wage gains as solid evidence that our economy is on solid footing."

As has occurred frequently in recent weeks, technology and small-capitalization issues outperformed much of the broader market Friday.

"Certainly there are problems surrounding several financial institutions and investors seem like they are channeling their investments away from financials and toward growth stocks and things like consumer staples, health care and technology," said Ablin.

But despite this enthusiasm, concerns about the financials continued to dominate. The Wall Street Journal, citing two people familiar with the matter, reported in the final minutes of the session Friday that Citi's board plans to meet over the weekend and that the discussion will include whether the bank will book further write-downs.

Citigroup, fresh off its biggest decline in years on Thursday, fell again Friday but pared much of the day's losses following report of the planned meeting. The stock closed down 78 cents, or 2 percent, at $37.73.

In addition to Citi, Merrill fell $4.91, or 7.9 percent, to $57.28, JPMorgan fell $1.17, or 2.6 percent, to $43.15, while Washington Mutual fell $1.94, or 7.5 percent, to $23.81.

Declining issues outnumbered advancers by about 6 to 5 on the New York Stock Exchange, where volume came to 1.72 billion shares compared with 1.74 billion shares traded Thursday.

The Russell 2000 index, which tracks the performance of small-capitalization stocks, rose 2.60, or 0.33 percent, to 797.78.

Overseas, Britain's FTSE 100 fell 0.84 percent, Germany's DAX index shed 0.40 percent, and France's CAC-40 declined 0.18 percent. Asian markets tumbled in the wake of Wall Street's losses on Thursday. Japan's Nikkei stock average closed down 2.09 percent, while Hong Kong's Hang Seng index fell 3.25 percent.

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