Futures up after stronger payrolls data, sell-off

Employers added 290,000 jobs in April, the Labor Department said, and revised figures for February and March to show 121,000 more jobs were added than previously thought. The unemployment rate, however, rose to 9.9 percent as the size of the labor force increased.

A Reuters poll of economists had forecast an April increase of 200,000 jobs and an unemployment rate of 9.7 percent.

It's a blowout number on the upside, tempered by the fact that the unemployment rate moved up, said Fred Dickson, chief market strategist at D.A. Davidson & Co in Lake Oswego, Oregon.

I would say that would give the (stock) market a little bit of a lift after yesterday's wild ride.

U.S. stocks tumbled 9 percent within the last two hours of trading on Thursday before clawing back some losses as a suspected trading error and fears of a new credit crunch in Europe threw markets into disarray.

S&P 500 futures rose 8.8 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures gained 56 points, and Nasdaq 100 futures added 10.75 points.

Nervous investors braced for volatility in the markets following Thursday's dramatic intraday bounce in shares.

You're really on a very emotional point for the market, and I think there will be less focus in any reality of corporate profits or economic news, at least in the short run, said Rick Meckler, president of LibertyView Capital Management in New York.

The German government's lower house of parliament approved a law to free up Germany's contribution to a multi-billion rescue package for Greece, despite widespread public opposition to the measure.

European stocks fell to a three-month low on Friday on mounting concerns the severe debt crisis may spread to other euro zone countries. The MSCI world equity index <.MIWD00000PUS> fell 0.9 percent.

Shares of Goldman Sachs Group Inc rose 1.5 percent to $144.47 in premarket trading after the Wall Street Journal reported the company was in settlement talks with the Securities and Exchange Commission over fraud charges.

American International Group Inc shares rose 2.5 percent to $37.60 in premarket trading after the bailed-out insurer posted a first-quarter profit, reversing a year-earlier loss as its investment portfolio gained in value.

Hong Kong and Shanghai shares overnight closed out their worst week in months, weighed down by the global flight from riskier assets and tightening measures in China to rein in inflation. <.SS>

The Dow suffered its biggest-ever intraday point drop -- 998.5 points -- on Thursday. The freefall may have been exacerbated by an erroneous trade that showed some shares briefly fell to nearly zero. The Nasdaq and other exchanges said they would cancel multiple erroneous trades.

(Editing by Padraic Cassidy)