The Dow Jones Industrial Average rose 48 points to 10712 in the first half-hour of trading after rising 85.80 on Thursday. The Standard & Poor's 500-stock index rose 9.40 to 1308.90 Friday, and the New York Stock Exchange Composite Index rose 2.90 to 627.10. The tech-heavy Nasdaq Composite Index rose 40.50 to 2443.80. The Labor Department's employment report for May proved a mixed bag of good and not-so-good news.

The market had been holding its breath all week for the data, considered a key element of the Fed's calculus of inflationary pressures. On the positive side, companies added only 11,000 new employees to their payrolls in May, far fewer than the 225,000 Wall Street had been expecting, and the slowest pace of job creation sinceJanuary 1996. But the unemployment rate fell to 4.2 per cent, its lowest level in 29 years, and tightening labor markets forced average hourly wages up to $13.19, higher than expectations.

"That's the fly in the ointment," said Arthur Hogan, market strategist at Jefferies & Co. Rising wages are an indication that inflationary pressures may be resurfacing, which could prompt the Fed to raise interest rates to cool the economy.

The market appears to be expecting an interest-rate increase "sooner rather than later," despite its initial euphoria to Friday's data, Hogan said. "If you look at how bond yields have behaved in the past two weeks and the drop in the stock market, investors seem to be saying `let's get this over with.' " Bonds were higher after the employment was released, but not by much. The yield on the government's benchmark 30-year bond inched lower. Technology stocks were the chief beneficiaries of Friday's economic news.