7:41 am - Stocks mostly rise as investors snap up financials

NEW YORK (AP) - Wall Street wrestled with intensifying economic worriesFriday, extending sharp losses after a disheartening jobs report and thengrudgingly engaging in some mild bargain hunting that gave the market somemodest gains. The major indexes ended the week with big declines, a sign thatinvestors, who not long ago expected the economy to improve, are now growingincreasingly discouraged. Stocks initially fell after the Labor Department reported that payrollsshrank more than predicted last month and that the unemployment rate reached afive-year high. But stocks that had been pounded lower, including a huge drop onThursday, were suddenly more attractive to investors willing to make some bets. The government said payrolls shrank by 84,000 last month, more than the75,000 economists predicted, and higher than the 51,000 jobs lost in July. Theunemployment rate rose to a five-year high of 6.1 percent from 5.7 percent. The report confirmed Wall Street's fears that the economy continues toweaken. The nation has lost nearly 550,000 jobs so far this year, erodinginvestors' hopes for a late-year recovery. "This was an ugly number that pretty much confirms that our economycontinues to trend downward," said Jack Ablin, chief investment officer ofHarris Private Bank. "I had thought things were stabilizing, and this justknocks the legs out of any hope of seeing much economic improvement right now." But investors, with little conviction but willing to make a few bets, pickedup some of the stocks hit in a sell-off Thursday, particularly banks andinsurers. That lifted the market off its lows, but it was hardly a solidadvance. The Dow Jones industrial average rose 32.73, or 0.29 percent, to 11,220.96;the blue chips had been down 150 points at their lows of the session. Broader stock ended mixed. The Standard & Poor's 500 index rose 5.48, or0.44 percent, to 1,242.31, and the Nasdaq composite index fell 3.16, or 0.14percent, to 2,255.88. Friday's moves follow a dismal performance on Thursday in which all threemajor indexes moved back into bear market territory, defined as a 20 percentdrop from a recent peak. The Dow plunged more than 340 points in a selloffunderpinned by disappointing economic news and lackluster sales reports fromretailers; the news drove home to investors that the economy was more troubledthan many had thought. For the week, the Dow lost 2.8 percent, its fourth straight week of lossesand the biggest drop since late June. The S&P 500 gave up 3.2 percent and thetechnology-heavy Nasdaq, home to many stocks seen as riskier than the bluechips, fell 4.7 percent. Bond prices fell Friday as investors took profits from the gains loggedearlier in the week. The yield on the benchmark 10-year Treasury note, whichmoves opposite its price, rose to 3.69 percent from 3.62 percent late Thursday. "Since mid-July I think it's become apparent that the global economies havereally weakened pretty sharply," said Thomas J. Lee, U.S. equities strategist atJPMorgan Chase & Co. in New York. He said that while investors had beenapplauding the drop in oil prices since then, there was an assumption that lowercommodities prices would hasten a recovery in the U.S. economy. Now, he said,investors are worried that the economy might be weakening even as oil falls. "It's disinflation coupled with an accelerating downside in the economy.That's not what people were prepared for. I think people were expectingdisinflation as an economic recovery was under way," Lee said. "The surge inunemployment today really underscores that fear." Wall Street again found little comfort from falling oil. Crude dropped tonearly $105 a barrel in Friday's session as the dollar continued to gain on theeuro and investors waited to see whether OPEC would move to restrict output nextweek following a two-month plunge in prices. The Organization of the PetroleumExporting Countries is scheduled to meet early next week in Vienna and hasindicated it may take action to defend the $100-a-barrel level. Light, sweet crude settled down $1.66 to $106.23 a barrel on the New YorkMercantile Exchange. Among financials carving out advances, Citigroup Inc. rose 77 cents, or 4.2percent, to $19.07, while Bank of America Corp. rose $1.63, or 5.3 percent, to$32.23. Wachovia Corp. rose $1.22, or 7.9 percent, to $16.75. Lehman Brothers Holdings Inc. rose $1.03, or 6.8 percent, to $16.20 after aSandler O'Neill & Co. analyst said he expects the troubled investment bank tosurvive the credit crisis. The stock has fluctuated on reports that it ishammering out a deal for a cash infusion or buyout. In the consumer staples sector, smokeless tobacco maker UST Inc. surgedfollowing a report from The New York Times that Altria Group Inc. plans toacquire the company. Altria, parent of Marlboro maker Philip Morris USA,dismissed the report as "pure speculation." Nonetheless, UST, the maker of Skoaland Copenhagen brands, jumped $13.55, or 25 percent, to $67.55, while Altriarose 29 cents to $20.95. Energy names slipped as oil continued its drop. Chevron Corp. declined $1 to$80.22, while ConocoPhillips fell $1.05 to $75.43. Advancing issues narrowly outnumbered decliners on the New York StockExchange, where consolidated volume came to 4.91 billion shares compared with5.11 billion shares traded Thursday. The Russell 2000 index of smaller companies rose 0.23, or 0.03 percent, to718.85. Investors overseas sent shares sharply lower on concerns about America'seffect on global growth. Japan's Nikkei stock fell 2.75 percent. In Europe, Britain's FTSE 100 endeddown 2.26 percent, Germany's DAX index dropped 2.42 percent, and France's CAC-40shed 2.49 percent. The Dow Jones industrial average ended the week down 322.59, or 2.79percent, at 11,220.96. The Standard & Poor's 500 index finished down 40.52, or3.16 percent, at 1,242.31. The Nasdaq composite index ended the week down111.64, or 4.72 percent, at 2,255.88. The Russell 2000 index finished the week down 20.65, or 2.79 percent, at718.85. The Dow Jones Wilshire 5000 Composite Index -- a free-float weighted indexthat measures 5,000 U.S. based companies -- ended Friday at 12,702.58, down421.91 points, or 3.21 percent, for the week. A year ago, the index was at14,846.39. Copyright 2008 Associated Press. All rights reserved. This material may not be