WALL STREET Major indexes reach highest level since '01

Job additions were about half the expected increase.
NEW YORK (AP) -- Mixed employment data helped Wall Street extend its New Year's rally Friday, as investors saw a slowdown in monthly hiring as a precursor to the end of the Federal Reserve's interest rate increases. The major indexes surged this week, finishing at their highest levels since mid-2001.
Strong advances for Yahoo Inc. and Google Inc. drove the technology sector, building on the market's energetic start to 2006. An upbeat reaction to International Business Machines Corp.'s pension news lifted the Dow Jones industrials within reach of 11,000.
Traders were mostly optimistic about a Labor Department report that employers added 108,000 jobs last month, about half the 200,000 increase forecast by economists and well behind November's 305,000 gain.
Interest rate increases
The languishing job growth signaled a slowing economy, one reason analysts believe the Fed will soon halt its string of rate increases. But a 0.3 percent jump in hourly wages -- topping estimates for a 0.2 percent rise -- renewed worries about inflation if that pattern is sustained.
"After the market rallied hard on the Fed minutes earlier this week, the perception had been building that good, but not strong, economic data is positive because that signals the Fed having to raise rates less," said John Caldwell, chief investment strategist for McDonald Financial Group. "It's one of those cases where good news is bad news for the economy."
At the close of trading, the Dow gained 77.16, or 0.71 percent, to 10,959.31. The Dow advanced 165 points through Thursday; the average has not closed above 11,000 since June 7, 2001, before the Sept. 11 attacks.
Broader stock indicators had their best finish since May 2001. The S & amp;P 500 was up 11.97, or 0.94 percent, at 1,285.45, and the Nasdaq climbed 28.75, or 1.26 percent, to 2,305.62.
Bonds were little changed, with the yield on the 10-year Treasury note rising to 4.37 percent from 4.36 percent Thursday. The dollar was mixed against most major currencies, while gold prices drifted lower.
A spike in crude futures did little to stop the market's momentum, further expanding this week's gains as political uncertainty in the Middle East sent jitters through the energy market. A barrel of light crude added $1.42 to settle at $64.21 on the New York Mercantile Exchange.