Stocks advance after payroll report

Far fewer jobs cut than expected

NEW YORK -- Wall Street gave up sharp gains to trade mixed Friday after a government employment report showed the nation's employers cut far fewer jobs than expected last month, stirring optimism about the buoyancy of the economy.

A separate report showing factory orders increased in March following two months of declines helped boost investors' enthusiasm. However, a surprise loss from Sun Microsystems Inc. weighed on the tech-laden Nasdaq composite index.

The better-than-expected employment report came days after the Federal Reserve lowered interest rates by a quarter point and signaled it could stand pat at future meetings -- a move that could help shore up an anemic dollar and combat worrisome inflation.

The Labor Department's report that employers cut 20,000 jobs in April was a relief to Wall Street, which had been expecting payrolls to decrease by 70,000 jobs. This marked the fourth straight month of job losses, but the data signaled that perhaps the economy might be resisting falling into recession.

The Commerce Department said Friday that U.S. manufacturers saw orders increase 1.4% in March. Economists expected a 0.2% increase after declines in January and February.

Meanwhile, the Fed said Friday it will work with European central banks to expand a series of efforts to deal with the global credit crisis. The central bank will boost the amount of emergency reserves it supplies to U.S. banks to $150 billion in May, up from the $100 billion it supplied in April.

"This is going to put some fuel in the tanks for stocks," Chris Johnson, president of Johnson Research Group, said of the employment report and the Fed's moves. "This was a direct hit in terms of the economy fighting back."

In late morning trading, the Dow Jones industrial average rose 43.40, or 0.33%, to 13,053.40 after being up more than 100 points earlier in the session.

Broader stock indicators turned mixed. The Standard & Poor's 500 index advanced 5.16, or 0.37%, to 1,414.50, and the Nasdaq composite index slipped 3.14, or 0.13%, to 2,477.57.

Stocks surged Thursday as investors viewed the rising dollar and falling oil prices as promising signs for the economy. The Dow soared nearly 190 points to close above 13,000 for the first time since Jan. 3.

Bond prices fell Friday as investors moved into stocks from the safety of government debt. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.86% from 3.77% late Thursday.

Light, sweet crude rose $1.92 to $114.44 per barrel on the New York Mercantile Exchange. The dollar was mixed against other major currencies, while gold prices fell.

In corporate news, Sun Microsystems shares fell $3.18, or 19.5%, to $13.15 after the company stunned investors late Thursday by reporting a loss for the third quarter. The server and software maker blamed the loss on sagging sales to U.S. consumer-oriented companies that are delaying big-ticket spending.

Advancing issues outnumbered decliners by nearly 2 to 1 on the New York Stock Exchange, where volume came to 382.7 million shares.

Overseas, Japan's Nikkei stock average rose 2.05%. In afternoon trading, Britain's FTSE 100 rose 2.19%, Germany's DAX index added 1.72%, and France's CAC-40 rose 1.34%.