NEW YORK: Wall Street rallied Friday in a delayed reaction to data showing a narrowing of job losses along with a rise in unemployment, offering hope that an economic recovery is on track.

The Dow Jones Industrial Average climbed 96.66 points (1.03 percent) to close at 9,441.27 in a second day of gains for the stock market.

The tech-heavy Nasdaq composite added 35.58 points (1.79 percent) to 2,018.78 and the broad-market Standard & Poor's 500 index was up 13.16 points (1.31 percent) to 1,016.40.

The market wobbled in early trade as investors struggled to interpret the report.

Analysts viewed the jobs numbers, showing unemployment climbing to 9.7 percent with 216,000 jobs lost in August from 9.4 percent and a revised 276,000 jobs lost in July, as giving conflicting signals.

"The bulls let out a collective sigh of relief today, after the government's highly anticipated payrolls report wasn't as sour as expected," said Andrea Kramer at Schaeffer's Investment Research.

"Against this backdrop, the bulls won the battle for the session, but the bears won the war for the first week in three."

Going into the Labor Day holiday weekend, the blue-chip Dow fell 1.18 percent for the week while the Nasdaq dipped 0.49 percent and the broad-market Standard & Poor's 500 index pulled back 1.22 percent.

Barclays Capital analysts said the payrolls report, one of the best gauges of economic momentum, was a bit weaker than expected on balance, due to a rising unemployment rate and small downward revisions to previous months, but did not alter the outlook for recovery.

"While the labor market is still showing significant job losses, the August employment report showed a continued slowing in their pace, and we expect job growth to turn positive by year-end as the recovery becomes entrenched and businesses feel more comfortable hiring," said Barclays economist Dean Maki.

He added that the data could mean "the recovery is even stronger than we have forecast."

Stock investors were also extra cautious ahead of a long Labor Day holiday weekend and the so-called September effect, reflecting the weakest month of the year in historical terms.

"Some caution until about the middle of the month makes sense in this extended market," said Al Goldman, chief market strategist of Wells Fargo Advisors.

Among stocks in focus, General Electric climbed 3.12 percent to 13.87 dollars. Reports said that aircraft parts maker Moog was in talks with GE Aviation Systems to buy its flight control actuation product line in Britain.

Boeing rose 1.42 percent to 49.15 dollars after reports the Geneva-based World Trade Organization ruled its European-based rival benefited from illegal subsidies.

Clothing and sports goods maker Quiksilver slid 17.48 percent to 2.36 dollars after reporting a 53 percent drop in quarterly profits.

The bond market fell. The yield on the 10-year Treasury bond rose to 3.442 percent from 3.328 percent Thursday and that on the 30-year bond climbed to 4.273 percent from 4.150 percent. Bond yield and prices move in opposite directions.