Wall Street cuts losses, closes up with techs, materials

Major indexes turned positive heading into the close, as investors scooped up shares in the technology and materials sectors -- two of the worst perforomers during the market's latest pullback.

It's bargain hunting in an oversold market, said Cleveland Rueckert, market analyst at Birinyi Associates in Stamford, Conneticut. At least in the short term, selling was overdone.

Earlier, the major indexes dropped more than 1 percent on the initial interpretation that January's payrolls data was another sign of a sluggish job market recovery, and concerns about the euro zone's sovereign debt problems persisted.

U.S. employers unexpectedly cut 20,000 jobs in January, but the unemployment rate dropped to a five-month low of 9.7 percent, the Labor Department reported.

The Dow Jones industrial average <.DJI> closed up 10.05 points, or 0.10 percent, at 10,012.23. The Standard & Poor's 500 Index <.SPX> ended up 3.08 points, or 0.29 percent, at 1,066.19. The Nasdaq Composite Index <.IXIC> gained 15.69 points, or 0.74 percent, to close at 2,141.12.

STOCKS' FOURTH WEEKLY SLIDE

For the week, the Dow fell 0.6 percent, the S&P 500 slid 0.7 percent and the Nasdaq lost 0.3 percent, marking their fourth consecutive weekly drop.

With some investors betting that the sell-off of recent days may have run its course, sectors that were beaten down headed higher late in the session.

Cisco Systems and Intel Corp ranked among the Dow's top advancers, and helped the Nasdaq erase losses. Cisco rose 2.3 percent to close at $23.70 and Intel gained 2.4 percent to end at $19.47.

Materials stocks also rebounded after falling throughout most of the day, with Alcoa Inc up 2.1 percent at $13.18.

European policy-makers scrambled to reassure markets about the stability of the 16-nation currency bloc, and Portugal backed a law that may push its swollen deficit higher.

The biggest losers included industrial shares, with General Electric Co off 1.6 percent at $15.79 and Boeing Co down 1.6 percent at $58.40.

On Thursday, the Dow briefly slipped below the crucial 10,000 mark as stocks suffered their worst daily declines in more than nine months.

Total volume of 12.44 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, well above last year's estimated daily average of 9.65 billion. It was the heaviest trade since Dec 18.

Declining stocks outnumbered advancing ones on the NYSE by a ratio of 17 to 13, while on the Nasdaq, about seven stocks rose for every six that fell.

(Reporting by Angela Moon; editing by Jan Paschal)