U.S. stocks cut losses and the Nasdaq turned positive on Friday after a strong jobs report and strength in large-cap Internet stocks.

The U.S. economy added 200,000 jobs in December, the Labor Department reported, topping forecasts, and the jobless rate fell to 8.5 percent, a near three-year low. The data added to strong employment reports on Thursday.

The Dow Jones industrial average <.DJI> was down 49.42 points, or 0.40 percent, at 12,366.28. The Standard & Poor's 500 Index <.SPX> was off 2.87 points, or 0.22 percent, at 1,278.19. The Nasdaq Composite Index <.IXIC> was up 1.78 points, or 0.07 percent, at 2,671.64.

Losses on Nasdaq were limited by Netflix Inc , which gained 5.3 percent to $83.50, and Amazon.com , up 3.5 percent to $183.77.

(Reporting By Ryan Vlastelica; editing by Jeffrey Benkoe)