NEW YORK ( TheStreet) -- The Dow finished with a triple-digit gain Friday, fueled by a lighter-than-expected drop in February nonfarm payrolls that appeared to reassure investors about recovery in the labor market.

The Dow Jones Industrial Average added 122 points, or 1.2%, to 10,566. The S&P 500 rose 16 points, or 1.4%, to 1139, and the Nasdaq went ahead by 34 points, or 1.5%, to 2326.

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The solid finish also helped the major averages finish the week to the upside, led by a 3.9% jump in the Nasdaq. The Dow improved 2.3% since last Friday, while the S&P 500 gained 3.1% on the week.

Stocks closed near their highs of the session after an early morning report said the economy shed 36,000 jobs last month. The figure from the Labor Department came well under economists' projections for a loss of 63,000, according to consensus estimates. The unemployment rate also surprised on the upside, holding at 9.7%, though economists forecast it would climb to 9.8%.

Leading up to the release, many market observers were concerned the report would reflect steeper losses, in part because of February's heavy snowfall. The government said today that weather may have played a role in some figures, but it didn't know for certain. Though the report was modest in reflecting a flat month for hiring, the subtle loss is buoying positive sentiment among investors.

"Is it the kind of number that reflects hiring is on fire? No," said Quincy Krosby, market strategist at Prudential Financial. "It's still slow going, but it's a positive trajectory that's trending in the right direction."

Also helping matters, an afternoon report from the Federal Reserve said consumer credit rose at a 2.4% annual rate, or by nearly $5 billion, in January. Consumer credit had sustained 11 straight months of declines before today's report.

Richard Sparks, senior equities analyst at Schaeffer's Investment Research, said the employment numbers and the market's late-session strength may represent a new, emboldened spirit among investors and a "shift in psychology" for the markets.

"Often, if you have a market that's prone to big drops, you'll see selling at the close, which shows a mindset of investors not wanting to be in. But this is the opposite," Sparks said. "This suggests market participants want to have exposure to risk, that they feel comfortable where the market is at and that it won't be prone to those drops."

John Canally, economist for LPL Financial, said February's steady unemployment rate increases the odds that the rate peaked at 10.1% last fall.

Alcoa ( AA), Boeing ( BA) and American Express ( AXP) led the Dow higher.

Telecom stocks trailed the broader indices highlighted by Dow component Verizon ( VZ), which was one of two blue-chip average stocks finishing the day in the red.

Shares of Citigroup ( C), Bank of America ( BAC) and Ford ( F) reflected the highest volumes on the New York Stock Exchange, which finished with a listed volume of 4.1 billion.

Major financial firms showed particular strength in light of the labor market news, as the KBW Bank Index added 1.8%. Crosby said financial stocks often react positively to improving jobs numbers because any hiring improvements signal more ability to pay off consumer debts. Bank of America ( BAC) and JPMorgan Chase ( JPM) were lending a hand to the Dow's move higher, rising 1.8% and 2.1%, respectively.

The dollar was trading lower against a basket of currencies, with the dollar index down 0.1%.

In commodities markets, crude oil for April delivery settled at $81.50 a barrel after adding $1.29, and the April gold contract gained $2.10 to settle at $1,135.20 an ounce.

The surge in commodities prices helped lift related equities, as the Philadelphia Gold and Silver Index improved 1.7%, and the NYSE Arca Oil Index went 2.1% higher. Blue-chip integrated oil firms Chevron ( CVX) and Exxon Mobil ( XOM) finished up about 1.6% each.

The benchmark 10-year Treasury weakened by 21/32, lifting the yield to 3.683%.

In other news, Greece will continue to be in focus, as Prime Minister George Papandreou met with German Chancellor Angela Merkel. At the conclusion of the meeting, Merkel told reporters that Greece did not ask for aid, according to Reuters. Reports also say the Greek parliament voted in favor of austerity legislation totaling some $6.5 billion in measures as citizens took to the streets in protest.

China also revealed its 2010 budget earlier in the day that anticipates a budget deficit around $154 billion.

The Washington Post reported that Rep. Barney Frank (D., Mass.), chairman of the House Financial Services Committee, suggested Fannie Mae ( FNM) and Freddie Mac ( FRE) investors are not on as safe a footing as Treasury bond investors , despite continuing assurances from officials about the safety of lending to the entities.

Apple's ( AAPL - Get Report) iPad will be available in the U.S. as early as April 3, according to the company. U.S. customers can begin pre-ordering the iPad on March 12. Shares surged to an all-time intraday high, closing 3.9% higher to $218.95.

Sony ( SNE - Get Report) is looking to heat up the iPad's competition by developing a new line of handheld products that have some of the same capabilities as netbooks, according to a report in The Wall Street Journal.

Marvell ( MRVL) shares added 1.3% to $20.40 after reporting a profit swing and improving revenue late Thursday.

Solarfun ( SOLF) also tumbled 9.1%, making it the solar sector's clear laggard, on slumping fourth-quarter gross-margins.

Tower Automotive, an auto supplier owned by Cerberus Capital, is planning to sell $100 million in stock in an initial public offering.

In deal news, Orbital Sciences ( ORB) plans to acquire General Dynamics' ( GD - Get Report) spacecraft development and manufacturing business.

Shares of TiVo ( TIVO - Get Report) finished 5.9% higher, extending gains made Thursday after a federal appeals court affirmed a District Court ruling against Dish Network ( DISH - Get Report) and EchoStar ( SATS - Get Report) for infringing upon TiVo's DVR patents. TiVo stands to receive $300 million as a result of the decision.

Following an arbitration process, General Motors said about 660 dealerships will be reinstated after being designated for closure.

Overseas, Hong Kong's Hang Seng gained 1% and Japan's Nikkei rose 2.2%. The FTSE in London climbed 1.3% and the DAX in Frankfurt went up 1.4%.

-- Written by Sung Moss and Melinda Peer in New York.