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Wall Street ends week with sharp rally

Blue-chip and technology stocks gain ground even though the Labor Department reports U.S. unemployment rose to its highest level in more than two years.

Investors shrugged off a lackluster jobs report Friday and resumed buying, sending the Dow Jones industrial average up 155 points to 10,951.30 and the Nasdaq up 45 points to close at 2,191.58.

For the week, the Dow added 141 points, while the Nasdaq moved up 116 points.

U.S. unemployment figures soared in April as companies cut jobs at the fastest rate since the recession of the 1980s. The jobless rate climbed to 4.5 percent from 4.3 percent in March, the Labor Department said Friday. The last time the rate was that high was in October 1998.

The stock market initially dropped after the Labor Department released the latest employment data. The news raised concerns that growing joblessness will cause Americans to pull back on the spending that helped power 10 years of expansion.

The market's early losses quickly evaporated, however, as investors looked past the gloomy job news and focused instead on the potential for a rebound by year-end.

"The market is looking forward and seeing a Fed cut in couple of weeks, perhaps a trough in earnings this quarter and perhaps better business conditions in the second half," Guy Truicko, equity portfolio manager at Unity Management, told Reuters. "That's what the market is going to continue to focus on--the end-game."

At the Merrill Lynch Hardware Technology Conference in New York on Friday, the chief operating officer for National Semiconductor said the mobile phone market is "still a tough place to be." He said he remains cautious about the flagging personal computer market, as well. National Semi shares lost $1.03 to $26.50.

Not everyone is as pessimistic about the telecommunications market. J.P. Morgan H&Q analyst Edward Snyder upgraded RF Micro Devices, which makes components for cellular phones, from "long-term buy" to "buy," based on improved outlooks for the company's main customer, cellular phone maker Nokia. RF Micro should be able to win Nokia contracts because it "has proven its reliability as a supplier to Nokia," Snyder said. RF Micro shares gained $4.40 to $32.42, while Nokia rose $1.24 to $33.64.

Cisco Systems was the most actively traded stock on the Nasdaq. Its shares added 98 cents to $19.64 despite a new "underperform" rating from Lazard Freres, which initiated coverage on the stock.

In leading volume movers, Intel picked up 48 cents to $30.88, Sun Microsystems slid 5 cents to $19.75, Oracle gained 64 cents to $17.09, and Microsoft closed up $2.22 to $70.75.

Among other leading tech issues, Nortel Networks fell 2 cents to $15.85, JDS Uniphase added 60 cents to $22.18 and Lucent picked up 45 cents to $11.15.

Staff and Reuters contributed to this report.