Stocks fell slightly on Friday as February's jobs report came in better than expected but fell short of the most optimistic expectations.

Payrolls rose by 192,000 in the month, above the 185,000 gain expected by a Reuters poll, and the jobless rate unexpectedly dipped to 8.9 percent from 9 percent. Strong data earlier in the week fed optimism that the number would be above 200,000.

Bets on big gains in payrolls pushed Wall Street to its best one-day rally in three months on Thursday.

The (jobs) number is pretty healthy and it points to continued recovery, but yesterday's market action anticipated that, said Hayes Miller, the Boston-based head of asset allocation in North America at Baring Asset Management, which oversees about $50.6 billion.

The Dow Jones industrial average <.DJI> was down 1.78 points, or 0.01 percent, at 12,256.42. The Standard & Poor's 500 Index <.SPX> was down 1.40 points, or 0.11 percent, at 1,329.57. The Nasdaq Composite Index <.IXIC> was down 4.67 points, or 0.17 percent, at 2,794.07.

The ongoing strife in Libya and its impact on oil prices will be another focus for investors as fighting intensified and rebels advanced toward a major oil terminal. U.S. April crude rose 1.4 percent while Brent crude futures added 0.9 percent.

Equities recently have had an inverse relationship with oil prices on the concern that high energy costs could weigh on economic activity.

Dow component Wal-Mart Stores Inc raised its annual dividend by 21 percent late on Thursday. The stock rose 0.3 percent to $52.19.

Data on January U.S. durable goods and factory orders will be released at 10 a.m., with factory orders seen rising 2 percent from December.

(Editing by Padraic Cassidy)