The month-old bull came face-to-face with its first big challenge today, and it held up well. The onward-and-upward charge of technology and blue-chip stocks was undeterred by a weak employment report.

The

Dow Jones Industrial Average

recovered with a vengeance from a 123-point decline early in the session on the weak jobs data, finishing up 154.59 points, or 1.43%, to 10,951.24. The

Nasdaq Composite

-- which also tumbled early on -- surged 45.3 points, or 2.11%, to close at 2191.50. The

S&P 500

finished the session up 18.03, or 1.44%, to 1266.61. All three indices closed near session highs.

"Today's rally shows that the market is extremely resilient at this point," said Scott Curtis, a trader at

Kaufman Bros

. "Bad news is not as bad as it seems."

The bad news in question was the April jobs data showing that unemployment rose to 4.5%, above the 4.4% expected by Wall Street and its highest level since October 1998. The data also showed that payrolls in April declined by 223,000, the largest one-month decrease since February 1991. A 5,000 uptick in payrolls had been expected.

Traders said comments from 1600 Pennsylvania Ave. indicating concern about the economy helped to placate lower Manhattan. At 10:15 this morning,

President Bush

said that he remained very concerned about the strength of the economy. "It is entirely possible that the 2% growth rate will be revised downward," White House spokesman Ari Fleischer said. "The

jobless data is evidence of that potential development."

"The White House statement raised hopes about a 50 basis-point cut on May 15," said Nick Angiletta, head of retail trading at

Salomon Smith Barney

. "Stocks turned up sharply right after that announcement."

The big question for Wall Street is what these numbers portend for the economy, the

Federal Reserve's rate-cutting initiatives and the nascent market rally. Now the consensus seems to be that the Fed will be aggressive at its next official meeting.

Still, traders were loath to say that this afternoon's advance legitimized the recent rally as an indicator of a bull market. "I'm surprised the market rebounded," said Ken Sheinberg, head of listed trading at

SG Cowen

. "I think we're in for a rude awakening; I just don't think the averages should be up at these levels."

Raising the bar on jitters is the impressive bull run of the past month. But that retreat came after a month of gains so large that some investors were questioning whether the market had gotten a bit ahead of itself.

For the week, the Dow finished the week up 1.3%, the Nasdaq surged 5.6% and the S&P gained 1.1%. The Dow is in positive territory for the year, while the Nasdaq and the S&P are still in the red.

Some tech stocks came back this afternoon, with

Cisco

(CSCO) - Get Report

, the biggest mover on the Nasdaq, closing up 5.3% to $19.64.

JDS Uniphase

(JDSU)

closed up by 2.8% to $22.18.

The chip sector was down, with the

Philadelphia Stock Exchange Semiconductor Index

, or SOX, closing off by 1.2%. But chip giant

Intel

(INTC) - Get Report

closed up by 1.6% to $30.88.

Sun Microsystems

(SUNW) - Get Report

closed off by 0.3% to $19.75 after

Sanford Bernstein

put out a note forecasting revenue growth below the company's estimates, while maintaining its market perform rating.

Microsoft

(MSFT) - Get Report

closed up by 3.2% to $70.75 after a mildly bullish note from

Merrill Lynch

analyst

Henry Blodget this morning. Blodget said he sees "slight upside" to Microsoft's earnings targets for the June quarter that could help boost the shares now.

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