"The market is reacting well to what two months ago would have been disastrous news," said Art Hogan, chief market strategist at Jefferies & Co. .
However, the outlook for equities "may change after next week, when we get news from Corporate America and what they think for the rest of the year -- we may see some estimate guide-downs," Hogan said, referring to the onset of first-quarter earnings season.
"If earnings are in line, people want to own stock, but in a recession-type environment, you want to own best-of-breed," said Dave Rovelli, managing director of equity trading at brokerage Canaccord Adams Inc.
After volatile moves in a 100-point trading range, the Dow Jones Industrial Average closed down 16.61 points to 12,609.42, giving it a weekly gain of 3.2%.
Of the Dow's 30 components, 17 settled with losses.
General Motors Corp. paced Dow decliners, off 4.7%, with the automaker's stock hit by word that a plan under which auto-parts manufacturer Delphi Corp. -- a key supplier to GM -- would emerge from bankruptcy suffered a blow . .
Shares of Delphi plunged 8.4%.
Financial stocks lost ground, with the Financial Select Sector SPDR down 1.4%. Within the Dow, shares of American Express Co. fell 1.2%, while J.P. Morgan Chase & Co. shed 1.5%.
Blue-chip gains were led by United Technologies Corp. , up 1.4%, and Caterpillar Inc. , ahead 1%.
The S&P 500 gained 1.09 points, to 1,370.40, giving it a 4.2% rise from where it stood one week ago.
Of the S&P sectors, materials fronted the benchmark's gains, rising 1.8%, followed by energy, up 1.5%.
Financials were down the most, off 1.9%, while telecommunications shed 1.5%.
The Nasdaq Composite climbed 7.68 points to 2,370.98, up 4.9% from where the tech-heavy index stood at Friday's close one week ago.
Bad news bulls
"It's amazing how this market absorbs bad news since the Bear Stearns debacle," said Dave Rovelli, managing director of equity trading at brokerage Canaccord Adams Inc.
"Everybody thinks we're toward the end of the big write-downs. Let's hope there are no more hidden bombs out there," said Rovelli.
Volume at the New York Stock Exchange topped 3.6 billion shares, while nearly 2 billion shares changed hands on the Nasdaq. Advancing stocks outpaced decliners by nearly 9 to 7 on the NYSE and edged just ahead on the Nasdaq.
An hour ahead of the opening bell, investors digested Labor Department data that showed U.S. employers cut back their hiring in March for the third month in a row. The jobless rate climbed to 5.1%, the highest since September 2005. .
On the New York Mercantile Exchange, crude-oil futures gained, with the spot month up $2.40 at $106.23 a barrel. .
Gold futures also climbed, with the contract for June delivery ending up $3.6 at $913.2 an ounce. .
In overseas trading, stocks in Tokyo fell, with automobile shares among those weighing on the market. .
And in Europe, shares wobbled in the wake of the U.S. jobs data before ending in the green. .
By Kate Gibson