Stocks Fade to Mixed Close After Early Rally

Updated from 4:11 p.m. EDT

Stocks lost steam on Friday, and booked an uneven finish, as oil prices rebounded and enthusiasm faded for an employment report that wasn't nearly as bad as economists were expecting.

The Dow Jones Industrial Average, up some 120 points earlier, surrendered most of those gains to close up 48.2 points, or 0.37%, to 13,058.2. The S&P 500 tacked on 4.56 points, or 0.32%, to 1413.9. Turning in the worst performance was the Nasdaq Composite, which ended down 3.72 points, or 0.15%, at 2476.99 amid dismal results from Sun Microsystems JAVA.

Breadth was mixed to end the week. Roughly 1.96 billion shares changed hands on the New York Stock Exchange, with advancers topping decliners by nearly a 3-to-2 margin. On the Nasdaq, volume reached some 2.28 billion shares as losers edged past winners 5 to 4.

"There was a big rush upwards yesterday, and I think that may have sapped most of the good news," said Edgar Peters, chief investment officer with Pan Agora. In the prior session, stocks soared in late reaction to the Federal Reserve's shift to a neutral tone earlier this week, when it cut the overnight lending rate by another quarter-point.

"Part of yesterday, I have a feeling, was a lot of short-covering," said Peters. "So that already took out a lot of the good upward momentum. The news today was good, but not good enough to sustain that momentum."

Still, thanks largely to the rally in the prior session, all three equity measures have achieved healthy gains for the week. Since Monday, the Dow has lifted by 1.3%, the S&P has added 1.2%, and the Nasdaq has spiked 2.2%.

Today's unwinding came as crude-oil prices surged to take back some of their big losses over the past few days. Crude futures settled up $3.80 to $116.32 a barrel. Gold, meanwhile, added $7.10 to $858 an ounce.

Even so, investors continued pulling their funds out of the safe haven of Treasury securities. The 10-year note lost 23/32 in price to yield 3.86%, and the 30-year bond tumbled 1-9/32 in price, yielding 4.58%.