The Dow Jones Industrial Average advanced 20.34 points, or 0.2 percent, to 8,598.02. The barometer had been up as much as 132.34 points at 12:13 p.m. EDT.
On the week, the Dow retreated 285.27 points, or 3.2 percent, for its third weekly loss in a row.
On the year, the Dow is up 689.77 points, or 8.7 percent, following gains of 33 percent, 26 percent, and 22 percent, in 1995, 1996, and 1997, respectively.
In the coming week, the economic calendar is fairly light until Thursday's release of July retail sales data. It will be followed by Friday's wholesale inflation and industrial production reports for July.
As for the Dow, it cascaded 1,005.92 points, or 10.7 percent from its July 20 intraday high of 9,367.84 to Wednesday's session low of 8,361.92. The decline was precipitated by fears that corporate earnings might remain sluggish over the next few quarters.
But Wednesday's dramatic late-day reversal, which saw the Dow battle back from a 125.39-point deficit at 3:24 p.m. ET to close the day up 59.47 points, boosted investor spirits.
Some market-watchers, however, were not ready to call the two-week price correction in blue-chip averages a done deal.
"I think we're in a wide-reaching trading range, with a probable test of the Wednesday low yet to come," said Bernadette Murphy, managing director at Kimelman & Baird, LLC. "In 1997, when we had similar market action, stocks were in a wide-reaching trading range. I'm anticipating that now."
In Friday's activity, smaller shares handily outperformed blue-chip issues for the second day, spearheaded by moves in computer-related stocks.
As for the blue-chip sector Friday, prices barreled higher in the morning after the government's July employment report revealed that inflation remained at bay. But a series of computerized sell programs whittled the market's advances in the afternoon session.
In Friday's market highlights:
- The Standard & Poor's 500 Index was basically unchanged.
- New York Stock Exchange winners blasted losers by 2 to 1.
- On the Big Board floor, turnover amounted to 761 million shares, about even with Thursday's tally.
- The Nasdaq Composite advanced 0.9 percent. Advancing issues led decliners by better than 3 to 2 in the Nasdaq Stock Market. Volume totaled 804 million shares.
- The Russell 2000 Index of small-capitalization stocks rose 2.3 percent.
- In the bond market, prices rose on a solid showing in the U.S. dollar, as traders focused on uncertainty in Asia. The 30-year Treasury advanced 19/32, to yield 5.633 percent.