Updated from 4:11 p.m. EDT


Ahead of the long Labor Day holiday weekend, investors enjoyed, well, the fruits of their labors. After a favorable spate of employment data this morning set a positive tone for the session, stocks moved higher in quiet trading.


Dow Jones Industrial Average ended up 23.68 to 11,238.78. Meanwhile, the

Nasdaq moved marginally higher helped by continued strength in telecom and biotech. The tech-laden measure finished the week up 27.98 to 4234.33.

The broad

S&P 500 was also higher, up 3.09 to 1520.77, while the small-cap

Russell 2000

inched up 4.02 to 541.91.

Both the Dow and the Nasdaq opened higher, but then slumped off their peaks throughout the day. But, traders saw quite a bit today that warmed their hearts.

"We're still on solid ground, still on an upward trend," said Ray Hawkins, vice president of block trading at

J.P. Morgan

. "It's relatively quiet after being overextended and overbought," he said of the Dow and Nasdaq. "In the short term, the path of least resistance is on the upside."

The Dow was able to shrug off weakness in

J.P. Morgan

(JPM) - Get JPMorgan Chase & Co. (JPM) Report

, which succumbed to profit-taking after tacking on over 10% Thursday. Today the shares lost 3.8%. Yesterday, Wall Street bid the stock higher on speculation that

Chase Manhattan


was sizing it up as a possible acquisition.

Retail stocks regained a little ground after yesterday's drubbing on disappointing same-store sales.


(WMT) - Get Walmart Inc. Report



(GPS) - Get Gap, Inc. (GPS) Report

were both higher. The

S&P Retail Index

was up 2.3%.

Yesterday's broad rally left investors with a good feeling. "The activity has taken a lot of people by surprise,

what with the big volume run-up we had yesterday," said Jim Maguire Jr., managing director at


. "Some of it is attributed to the end month, but I think you have to also take into account that the market is getting good leadership from financials and tech."

As Wall Street's finest headed to their vacation posts for the long Labor Day weekend, the

employment report


definition |

chart |


) released this morning, was helping them get into that vacation mode.


Labor Department's

employment report made good on Wall Street's bets the U.S. economy is cooling off. The nonfarm payrolls, showing new jobs created during August, fell 105,000 from July's 51,000 decline. The jobless rate came in at 4.1%, a hair higher than last month's 4% figure, while August's average hourly earnings came in at $13.80, up 0.3% from July's $13.76 average. In a

separate story,


wrote about what the economic data means.


employment report wasn't exactly cut and dry. The nonfarms payroll was affected by the shrinking Census payroll, which made the number smaller than it would have been. Also, the data factored out the 90,000

Verizon Communications

(VZ) - Get Verizon Communications Inc. Report

workers who took to the picket lines during August but are now back to work. If not for Verizon, nonfarm payrolls would have risen by 102,000.

In company action,



was getting wrecked after issuing third- and fourth-quarter profit warnings. This morning,

Credit Suisse First Boston

cut Hertz's rating to hold from buy. The stock ended off $4.81, or 15.7%, to $25.81.

Hertz wasn't the only profit-warning story today.



, a digital-business developer for corporations, slipped 41% after warning that it would post a third-quarter loss.

Lehman Brothers

slashed Viant's rating to a neutral from buy.


wrote about Viant in a

separate story yesterday.

Adding insult to Viant's profit warning injury, analysts this morning went after the entire Internet consulting firm sector. Viant's competitor,



was also taken down with a slew of downgrades. Shares of Scient ended down 18.7%. Additionally,



lowered 8.7%;

IXL Enterprises


decreased 12.4%; and



slid 6.8%.

Further pressuring the Internet sector, but not inhibiting the Nasdaq, was



. Shares of the Internet bellwether ended off 6.2%.

Last night, Yahoo! announced that it would take a third quarter charge for expenses related to its acquisition of email company

TheStreet Recommends


. Additionally, the "Heard on the Street" column in the

Wall Street Journal

stated that it may be time for Yahoo!'s stock to take a turn. On Monday,

Lehman Brothers

analyst Holly Becker said it was only a matter of time before the slowdown in advertising spending by dot-coms would hit Yahoo!'s results.

On the upside,

Terra Networks


, the Web division of Spanish-based


, jumped 7.2%. Buyers have grown more interested in its planned acquisition of



. Lycos also traded higher, up 5.1%.

And the tire saga continues: Today, the

National Highway Traffic Safety Administration

announced that it had asked


earlier this week to recall an additional 1.4 million tires not included in the original 6.5 million total, but the tire company refused.

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Market Internals

Breadth was positive on light volume.

New York Stock Exchange: 1,624 advancers, 1,168 decliners, 771.56 million shares. 122 new 52-week highs, 22 new lows.

Nasdaq Stock Market: 2,226 advancers, 1,748 decliners, 1.441 billion shares. 145 new highs, 48 new lows.

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Most Active Stocks

NYSE Most Actives

Nasdaq Most Actives

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Sector Watch

Telecom gained momentum all day, with the

Nasdaq Telecom Index

bouncing 2% higher. On the NYSE,


(VOD) - Get Vodafone Group Plc Sponsored ADR Report


British Telecom




(NOK) - Get Nokia Oyj Sponsored ADR Report

continued to connect with buyers after moving higher in overseas trading.


Philadelphia Stock Exchange Semiconductor Index

was down 0.9%, after initially moving higher this morning.


American Stock Exchange Broker/Dealer Index

climbed 1.1%, after soaring over 17% in the last month. Even before

Donaldson Lufkin & Jenrette



Credit Suisse First Boston's

combination ignited merger speculation in the sector, the group had a strong run on the stabilization of interest rates and the return of activity to the IPO market.

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Purchasing Managers' Index


definition |

chart |


), also released this morning, provided further proof the economy is in slowdown mode. The August report came in at 49.5, weaker than a


poll forecast of 51.9 and weaker than July's 51.8 number. A PMI reading below 50 indicates a tightening in manufacturing.

The benchmark 10-year Treasury was recently up 10/32 to 100 16/32, yielding 5.685%.

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The European indices

closed higher, with telecom showing strength.



rose 122.30 to 6795, while Germany's


gained 138.32 to 7354.73. The French


tacked on 188.24 to 6813.66.

After pumping into higher territory, Japanese shares lost momentum and closed lower as local brokerage dealers squared off positions ahead of the weekend and Monday's market holiday in the U.S.

The key

Nikkei 225

index shed 121.48 to close at 16,739.78, while the


index, which includes all shares listed on the

Tokyo Stock Exchange's

first section, lost 3.96 to finish at 1507.48. The


small-cap index rose 0.23 to end at 83.31, while the Nikkei

over-the-counter index

gained 1.64 to close at 1734.79.

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