Wall Street held onto gains for the week -- and some say momentum as well -- weathering a disappointing US labor report, with investors generally upbeat ahead of the corporate earnings season.
The Dow Jones Industrial Average of 30 blue-chip companies climbed 0.47 percent in the week to Friday to close at 10,468.89 for a seventh consecutive weekly gain.
The broad-market Standard & Poor's 500 rose 1.21 percent for the week to 1,121.86 and the tech-heavy NASDAQ composite gained 4 percent to 2,086.92.
Markets rallied early in the week on the upbeat outlook for corporate earnings and the economy.
But the gains were eroded by a stunningly weak employment report Friday that showed a meager 1,000 jobs created in December, raising concerns about how long the US expansion can continue.
"The stock market weathered the turbulence generated by Friday's jobs report relatively well," said Lynn Reaser, chief economist at Banc of America Capital Management. "Investors still appear to believe that upcoming earnings news will be favorable."
Peter Cardillo at Global Partners Securities said the market needed a pullback after a strong series of gains but remains on an upward bias.
"The momentum in the market continues to the upside," he said, adding that Friday's jobs data "served as an excuse to take some money off the table. It was vulnerable to a down day."
Mace Blicksilver, director of trading at Marblehead Asset Management, called it "a very constructive week for the stock market. There really is no downside."
Blicksilver added that "economic statistics may be more bullish than they appear on the surface" and predicted that "earnings pretty much will be fine."
Moreover, he said investors remain bullish after a strong run to close out last year and positive market action early this year.
"Everyone spent the last six weeks buying and no one wants to sell now," he said.
Although the economy roared at an 8.2 percent pace in the third quarter, some fear that sluggish job growth could dampen consumer sentiment and spending and eventually pull the pace of growth down.
"Fed officials must be quite nervous this morning, as the continuing lack of meaningful employment growth can represent a serious risk to the recovery's sustainability," added Anthony Karydakis at Bank One. "The economy can keep going for a few quarters on tax cuts, productivity gains and tax refunds, but its momentum will be undercut unless hiring picks up significantly."
However, David Littmann, chief economist of Comerica Bank in Detroit, Friday's employment report is no reason to panic.
"Direction is more important than magnitude at this point," he said.
The bond market surged, as investors bet that a sluggish labor market would keep inflation in check and allow the Federal Reserve to maintain its easy money policy.
The yield on the 10-year US Treasury bond slid to 4.086 percent from 4.373 percent a week earlier, and that on the 30-year bond dropped to 4.967 percent from 5.176 percent. A drop in yields reflects higher bond prices.