Stocks slowly climbed out of a 150-point hole to close in the green Friday, despite news that the nation's economy lost 84,000 jobs and unemployment now stands at 6.1%. 

Today Markets

At the 4 p.m. close in New York, the Dow Jones Industrial Average gained 32.73 points, or 0.29%, to 11220.96. The broader S&P 500 Index rose 5.48 points, or 0.44%, to 12342.31, while the Nasdaq Composite slipped 3.16 points, or 0.14%, to 2255.88. The consumer-friendly Fox 50 rose 2.02 points, or 0.23%, to 893.17. 

The Dow had been down as much as 150 points.

The financial stocks, which had been down most of the day and were hammered on Thursday, rebounded by mid-afternoon trading as investors sought bargains in the battered sector. That rebound helped lift the broader market. JPMorgan Chase (JPM), Citigroup (C) and American International Group (AIG) were now all up more than 4%. The biggest lagger on the Dow was defense contractor United Technologies (UTX), which was down 1%.

The turnaround came after Reuters reported the investment bank Lehman Brothers (LEH) might be shopping itself to a few big-name private equity firms. According to the report, the Blackstone Group (BX) and Kohlberg Kravis Roberts & Co., might be looking at Lehman's real estate and asset-management businesses. The real estate unit could be work as much as $5 billion. 

Lehman shares, which were down earlier in the day, closed up more than 8% on the news. 

Also in the financial sector, Goldman Sachs (GS) placed the brokerage house Merrill Lynch (MER) on its "conviction sell" list this morning, which sent shares of Merrill down more than 5% in earlier trading.

Despite the Lehman news, a cloud hovering over the markets remains the sluggish economy. The U.S. Labor Department said the nation lost 84,000 jobs in August, which translates into a psychologically significant 6.1%.Economists were expecting a loss of 75,000 and an unemployment rate of 5.7%, according to data provided by Thomson Reuters. So far this year, the nation has lost approximately 600,000 jobs.

The Labor Department said this month's job loss was broad-based, affecting manufacturing, the service sector and construction. 

"A number like this can have a psychological effect on the markets," said Quincy Krosby, chief market strategist with The Hartford. "As unemployment rate goes up, the market starts gets scared that consumers aren't going to be able to pay their mortgages, car loans and student loans. And we're already having trouble with those."

This being an election year, politicians from both sides of the aisle were quick to react to the numbers.

"While these numbers are disappointing, what is most important is the overall direction the economy is headed," the White House said, citing last week's surprising 3.3% increase in the nation's gross national product.

The stock market got two mildly disappointing employment reports on Thursday, which helped spur the 350-point drop in the Dow. Both reports had indicated that today’s jobs report could be worse than what economists had predicted.

"We are still dealing with the fear factor again," said David Henderson, a floor trader on the New York Stock Exchange, in an interview on FOX Business. "We have had a lot of damage done in the shortened week. Thank God it was a short week.

Fed Fund Futures, a security traded in Chicago that bets on the direction the Federal Reserve will move interest rates, were reflecting a chance that central bank might cut rates by the end of the year. The markets, however, are giving no indication that the Fed will raise rates to combat inflation.

In the commodities markets, oil and gold continued their week-long slump. Oil fell $1.47 to $106.40 a barrel while gold continued to seesaw throughout the day.

Company News

Samsung Electronics  is considering a purchase of U.S. memory chip company SanDisk (SNDK), a South Korean online business newspaper reported Friday.

Shares of UST (UST), formerly known as U.S. Tobacco, were up 20% in early market action after The New York Times reported that Altria (MO), formerly known as Phillip-Morris, is considering purchasing the company.

Finland-based cell phone giant Nokia (NOK) said a price war was causing the cell phone company to lose market share in the third quarter. Shares of Nokia were down 10% in pre-market action. Qualcomm (QCOM), a cell phone chip company closely associated with Nokia, were down 2% as well.

Continental Airlines (CAL) said it would begin to chare $15 fee for the first checked bag for economy-class passengers. This follows the trend of many other airlines who have begun to charge for checked baggage including American Airlines (AMR), Delta Air Lines (DAL) and United (UAUA). 

Shares of handgun maker Smith & Wesson (SWHC) fell over 11% after the company reported a 52% drop in quarterly profit as less people purchased their famous hunting rifles and pistols.

An investor who has expressed interest in buying luxury retailer Saks (SKS) is unlikely to pursue a bid this year, according to a report in The New York Post. 

Global Markets

The Dow Jones Euro Stoxx 50 Index, which tracks the 50 largest companies in Europe, was fell 71.14 points, or 2.17%, to 3203.68. 

In Asia, Japan's Nikkei 225 Index fell 345.43 points, or 2.75%, to 12212.23, while Hong Kong's Hang Seng dropped 456.20 points, or 2.24%, to 19933.28.

Data Dump

The nation's mortgage delinquency rate rose to 6.41% in the second quarter, the Mortgage Bankers Association said in a statement. It is the highest rate for the housing markets since at least 1979, when the trade group began tracking that information.