NEW YORK — Wall Street closed out the week with a mixed performance Friday, showing more stability after its recent plunge but also revealing lingering signs of nervousness despite an upbeat report on employment.
The positive jobs data gave stocks a boost, but the gains were eroded by a jump in wholesale inventories and more evidence of subprime mortgage problems. Lending worries were a big factor in the market's drop.
Investors were also uninspired by speeches by Federal Reserve officials in the after-
noon. Susan Bies, an outgoing member of the Fed's rate-setting Open Market Committee, said the economy is strong and job creation is "incredible" but that the troubles with the subprime lending market could escalate. Meanwhile, the Fed's main hawk, Richmond Fed President Jeffrey Lacker, said that inflation expectations aren't anchored enough.
Strength in the job market did help calm investors who feared that the economy might slow too abruptly, but it didn't erase the skittishness in the market, which last week had its worst week in four years.
"Generally, most people are still concerned that this downdraft is not over," said Doug Johnston, head of U.S. trading at Canaccord Adams in Boston. He said that while most economic data and corporate earnings have shown decent growth, investors are still spooked after last week's dive. "The marketplace itself is an emotional animal."
The Dow Jones industrial average rose 15.62, or 0.13 percent, to 12,276.32, after trading in both positive and negative territory over the course of the day.
Broader stock indicators were mixed. The Standard & Poor's 500 index rose 0.96, or 0.07 percent, to 1,402.85, while the technology-dominated Nasdaq composite index fell 0.18, or 0.01 percent, to 2,387.55.
Friday's directionless trading capped a volatile week that saw the Dow drop near the 12,000 mark on Monday, then rally back as global stock markets recovered. The Dow is up 0.13 percent on the week; the S&P 500 is up 1.13 percent; and the Nasdaq is up 0.83 percent.
"It was a good comeback. Let's see what other economic data comes out, as the days and weeks go by," said Stephen Carl, principal and head of equity trading at The Williams Capital Group. "Barring anything out of the ordinary, I think the market's going to hang in there OK."
If next week's inflation data comes in high, however, it might reduce the chance that the Fed will lower rates later in the year, and may even raise the chance of a rate hike — a move that could hurt stocks.
"It's turning back into a 'What's the Fed going to do?' kind of game," said Scott Merritt, U.S. equity strategist at JPMorgan Asset Management. The Federal Reserve is widely expected to leave the benchmark rate steady at 5.25 percent when it meets March 20-21, but any change in the accompanying statement could rile the markets.