Updated from 4:06 p.m. EDT

Stocks wrapped up a good week with some solid gains, as traders shrugged off a lukewarm jobs report and cheered the end of earnings season.

The Dow Jones Industrial Average gained 128.43 points, or 1.5%, to 8582.68, its best close since January, while the Nasdaq rose 30.32 points, or 2.1%, at 1502.88, its best close since June of last year. The S&P 500 jumped 13.78 points, or 1.5%, at 930.08. For the week, all three indices posted gains, with the Dow up 3.3%, the Nasdaq up 4.7% and the S&P up 3.5%.

While weak, the jobless number was largely in line with economists' forecasts and better than the bleak predictions some market watchers had made. According to the Labor Department, the economy shed 48,000 jobs in April and the unemployment rate added two-tenths of a percentage point to 6%. The job contraction brings the three-month decline to 525,000 and marks only the second time since 1945 that payrolls have fallen for three straight months in the absence of a formal recession.

"The employment number came in relatively benign, and I think people were out there looking for a disappointing number. That never came to pass," said Bob Basel, director of listed trading at Salomon Smith Barney. "The fact the employment number wasn't so bad is the key for the day. I like the tone of this market overall."

Volume was stronger than in recent sessions. The New York Stock Exchange, which traded 1.38 billion shares on Thursday, had traded more than 1.53 billion shares on Friday. Meanwhile, the Nasdaq Stock Market traded more than 1.83 billion shares, topping the 1.46 billion shares traded on Thursday. While interest in stocks was strong, it wasn't enough to top the best levels of 2003.

Indeed, the solid market gains on heavy action, combined with the fact that markets had risen during the month of April, made some traders optimistic that the rally could continue. "After such a good month last month, where the S&P was up 8%, you have a continuation of that rally because earnings are not so bad, unemployment wasn't so bad, the war is over," said Giri Cherukuri, head trader at OakBrook Investments. "A lot of things have cleared up the picture, and there's a lot less uncertainty."

While earnings season was wrapping up, a couple industry heavyweights have reported since Thursday night's close.

Oil giant Royal Dutch/Shell ( RD) said it earned $5.3 billion in the first quarter, up from $2.3 billion last year due to spiking oil prices during the Iraq war. Sales were $69.4 billion in the quarter, up 45% from a year ago. Shares or Royal Dutch Petroleum rose 2.4% to $42.35.

Elsewhere, ChevronTexaco ( CVX) said first-quarter earnings topped Wall Street expectations by 21 cents a share on a nearly 50% revenue increase. Shares rose 3.7% to $65.35.

Insurer John Hancock Financial ( JHF) earned $253.2 million, or 88 cents a share, compared with net income of $146.5 million, or 49 cents a share, a year earlier. Before investment gains the company earned $214.1 million, or 74 cents a share, beating the analyst consensus by 2 cents. Shares fell 0.2% to $28.69.

One big winner was priceline.com ( PCLN), which jumped 32.5% to $3.14 after the company posted slightly better-than-expected pro forma results and said it would seek approval for a reverse stock split. The split could be as big as 1-for-9.

StemCells ( STEM) skyrocketed 127% to $1.68 after the company reported promising preclinical trial results on a stem cell study that will be presented on Friday. Others in the space were rising as well, with Aastrom Biosciences ( ASTM) gaining 23.1% to 48 cents and Geron ( GERN) gaining 7.2% to $4.88.

Broadcom ( BRCM) gained 6% to $18.96 after the company said it would take an $88 million charge and incur $25 million in cash payments related to its acquisition of ServerWorks.

Insurer Cigna ( CI) reported first-quarter earnings that beat estimates by four cents a share. Cigna fell 5.4% to $50.78.

St. Jude Medical ( SJT) said it made a $15 million investment in Epicor Medical, with plans to purchase the rest of the company by 2004 for an additional $185 million, if Epicor can reach certain clinical milestones. Shares in St. Jude gained 0.5% to $15.35.

On the research front, Merrill Lynch upgraded five airlines, telling investors that the worst may be over for most airlines with the war over and SARS fears dissipating. Merill upgraded Alaska Air ( ALK), Continental ( CAL), Delta ( DAL), Frontier Air ( FRNT) and Northwest ( NWAC) to buy from neutral. The Amex Airline Index, a good industry barometer, rose 10.5%.

Along with the airline industry, banks were rallying on Friday. The Philly Banking Index rose 1.9%, hitting eight month highs as regional banks contributed to the index's strength. Notable winners include Key Corp. ( KEY), up 2.6%, Fleet Boston Financial ( FBF), up 2.5%, and Bank One ( ONE), up 2.8%.

Bank of America ( BAC) rose 0.9% to $74.91 after Goldman Sachs upped its price target on the company to $90 from $85, citing positive benefits from strategic initiatives.

General Motors ( GM) gained 0.9% to $35.80 after Lehman Brothers cut the company to underweight from equal weight, warning investors that the company won't be able to pick up market share by dropping its prices anymore. End result: lower earnings potential in the back half of 2003.

Jack in the Box ( JBX) was upgraded to buy from neutral at Merrill Lynch, which told investors that same-store sales would stabilize and show growth by the end of the summer. Shares rose 9.8% to $19.

Treasuries were lower on the jobs data, with the 10-year note down, boosting its yield to 3.93%. European markets ended strong, with London's FTSE 100 closing up 1.9% at 3953 and Germany's Xetra DAX closing up 1.5% at 2896. In Asia, Japan's Nikkei closed up half a percent at 7907, and Hong Kong's Hang Seng rose 1% to 8808.