U.S. stocks ended mixed on Friday, with the S&P 500 Index closing below 1,200, as better than expected U.S. July jobs data and a deal Italy struck with the European Central Bank (ECB) were not enough to cheer investors.

The S&P 500 fell 0.69 points, or 0.06 percent, to end at 1,199.38.  The Dow Jones Industrial Average rallied 60.93 points, or 0.54 percent, to close at 11,444.61.  The Nasdaq Composite dropped 0.94 percent.

Crude oil futures ended positive for the session and the euro rallied against the U.S. dollar.

Early in the U.S. session, sentiment was decidedly more negative.

The highly-anticipated July U.S. jobs report, release at 8:30 a.m. ET, came in better expected, showing a 117,000 payrolls gain versus the 85,000 gain forecast by economists surveyed by Bloomberg.

However, the upside surprise was not enough to change the market's perception that the U.S. economic growth has grinded to a halt in the last three months.

Contrastingly, back in March and April, monthly payrolls gains topped 200,000 and economists were gushing about an annual GDP growth rate of 3 percent or more.

Late in the New York morning session, multiple media outlets reported that Italy has struck a deal with the European Central Bank (ECB) for the latter to buy Italian bonds in the open market. 

Subsequently, Italian Prime Minister Silvio Berlusconi publicly announced a series of steps to speed up the country's austerity measures, which were widely believed to be what Italy gave up in exchange for the ECB agreeing to buy its bonds.

ECB buying (depending on the amount of the purchases) could lower yields on Italian bonds, discourage attacks from bond vigilantes, and give investors more confidence.

After this development, U.S. stocks (and global risk assets) reversed earlier losses.  However, the positive developments were not enough to lift the S&P 500 above 1,200 as the U.S. economic growth remains weak and lingering questions remain about Italy and Europe.