Stocks moved broadly higher on Wall Street in afternoon trading Friday, placing the market on track to notch a second straight weekly gain after a wobbly start to the week.
Health care companies, household goods makers and retailers powered much of the buying. Cardinal Health rose 2.3%, General Mills gained 1.8% and Home Depot added 1.4%.
Bond yields fell, utilities stocks lagged and gold prices declined as traders continued to shift away from safe-haven assets in favor of riskier holdings.
Facebook dropped 1.6% after New York's attorney general announced an antitrust investigation into the company.
The market had a muted reaction to new data showing U.S. employers added fewer than expected jobs in August. The Labor Department's report also included more encouraging news: more people entered the workforce last month, wages rose more than expected and the unemployment rate remained near the lowest level in five decades.
Traders are scrutinizing economic data for clues about how the economy is weathering the costly trade war between the U.S. and China. Investors worry that the conflict, and the tariffs that each side has imposed on billions of goods, may be dampening global economic growth and threatening to nudge the United States into a recession.
The jobs report was the latest in a mixed batch of economic data that traders weighed this week. The market sold off on Tuesday after expanded tariffs between Washington and Beijing kicked in and new data indicated that U.S. manufacturing contracted in August for the first time in three years.
Other economic reports have been more positive. Data indicating that companies are still hiring at a solid pace and that productivity rose at a healthy rate last quarter helped drive a strong market rally on Thursday.
Investors have also been encouraged this week by news that envoys from the U.S. and China plan to begin another round of trade talks next month.
"It's been a pretty bullish week and I'm a bit surprised the market has gone as far as it has," said Randy Frederick, vice president of trading & derivatives at Charles Schwab. "I don't think the trade tariffs issue is going to get resolved any time soon, and I don't see that we're a whole lot further along right now than where we were a month ago, when the market was significantly lower than it is."
The market got a modest bounce Friday afternoon after Federal Reserve Chairman Jerome Powell said the central bank is not expecting a U.S. or global recession. In remarks at a conference in Switzerland, Powell noted that the Fed is monitoring a number of uncertainties, including trade conflicts, adding the Fed will "act as appropriate to sustain the expansion."
Economists said Friday's jobs report did little to change their forecasts for the Fed to cut interest rates at its meeting in two weeks.
Treasury yields dipped following the report, and traders remain nearly certain that the Fed will cut short-term rates by a quarter of a percentage point.
It would be the second such cut since August, following nine increases since December 2015, as the central bank tries to cushion the blow on the economy from the U.S.-China trade war. U.S. manufacturing has already slid due to the tensions, and the worry is that businesses could pull back on their spending next.
KEEPING SCORE: The S&P 500 was up 0.2% as of 3:40 p.m. Eastern time.
The Dow Jones Industrial Average rose 91 points, or 0.3%, to 26,819. The Nasdaq rebounded from an early slide, adding 0.1%.
Major indexes in Europe finished higher. Earlier in the day, China's central bank cut a key interest rate, which helped push Asian markets higher.
JOBS REPORT: Employers added 130,000 jobs last month, short of the 160,000 that economists expected and down from July's growth of 159,000. But average hourly earnings rose 3.2% from a year earlier, more than economists expected.
The jobs report also allayed worries that surfaced in the previous month's snapshot, which showed the average work week dipped in July to 34.3 hours from 34.4. When employers cut back on employee hours it can signal a coming pullback on hiring. The data for August showed the average work week rose to 34.4 hours.
"The work week ticked up, so you're not really concerned there's a start of an uptick in unemployment," said Tom Martin, senior portfolio manager with Globalt Investments. "That's pretty positive."
Strong spending by households has been the economy's driving force, even as manufacturers struggle under the weight of increased tariffs. Manufacturing slowed last month for the first time in three years, according to a survey by the Institute for Supply Management.
Investors have grown increasingly concerned about whether consumer spending can remain strong enough to keep the economy from tipping into a recession for the first time in a decade.
A RARE QUIET DAY: Markets have been turbulent in recent weeks as worries about the trade war have waxed and waned. Between Aug. 1 and Thursday, just over half of all trading days saw the S&P 500 swing by more than 1%.
The S&P 500 has remained stuck between roughly 2,840 and 2,940 since the start of August, but it broke above that range this week after U.S. and Chinese officials agreed to hold talks in Washington next month. The S&P 500 is at its highest level in five weeks and just 1.6% below its record set on July 26.
YIELDS: Treasury yields fell following the release of the jobs report. The yield on the 10-year Treasury dipped to 1.55% from 1.56% late Thursday. The two-year yield held steady at 1.53%, and the 30-year yield fell to 2.02% from 2.05%.
A GOOD STRETCH: Lululemon Athletica climbed 7.7% after the athletic apparel maker handily beat Wall Street's fiscal second quarter profit expectations and raised its profit forecast for the year.
REBOOT THIS: Science Applications International slid 8% after the information technology company gave investors disappointing second quarter revenue results.
AP Business Writer Stan Choe contributed.