Stocks rose on Friday, on course for their best week in almost three years, after the U.S. unemployment rate dropped to a 2-1/2 year low, but resistance close to a key technical level limited gains as traders booked profits before the weekend.

Improving U.S. economic data has heartened investors. U.S. companies stepped up hiring and the jobless rate dropped to 8.6 percent from 9 percent, further evidence the recovery was gaining momentum and U.S. equity markets may decouple from a likely recession in Europe.

The S&P 500 was up more than 8 percent for the week, its best weekly performance since March 2009.

Equities also got a boost after Bloomberg cited sources as saying the European Central Bank was gearing up to lend as much as 200 billion euros ($270 billion) to the International Monetary Fund in a bid to ease the debt crisis.

Financial shares were the biggest gainers on the day as the S&P financial index <.GSPF> rose 2.1 percent. JPMorgan Chase gained 8 percent to $32.90.

Everything is macro right now and we all know hedge funds and 'long onlys' are particularly uninvested, and the higher we go equals more pressure on them to play catch up, said Sam Ginzburg, head of capital markets at First New York Securities.

Unless you have some macro event -- which we probably will -- the market can be directionally firm to higher into the end of the year, but again you're playing with fire.

The S&P 500 came within striking distance of its 200-day moving average, an important technical level, and turned briefly positive for the year before paring gains.

The Dow Jones industrial average <.DJI> gained 16.68 points, or 0.14 percent, to 12,036.71. The Standard & Poor's 500 Index <.SPX> rose 3.70 points, or 0.30 percent, to 1,248.28. The Nasdaq Composite Index <.IXIC> added 8.00 points, or 0.30 percent, to 2,634.20.

Stocks came off their highs as talk circulated among traders, ranging from a possible downgrade to credit ratings of Spain and Japan this weekend, a bill in the U.S. Congress to halt an IMF bailout of Europe, and military action in Iran.

The people who want the market to come in, i.e., the shorts, are throwing stuff up against the wall to see if anything will stick, said Ginzburg.

None of the market talk was substantiated.

U.S.-listed shares of Research in Motion Ltd dropped 8.8 percent to $16.95 after the BlackBerry maker said it will record a pretax charge to write down the value of its poorly received PlayBook tablet computer.

Google Inc rose 1.1 percent to $620.77 after the Wall Street Journal reported the Internet group was pondering an Internet service to help consumers shop online with one-day delivery service to cut the loss of Web traffic to Inc .

(Editing by Kenneth Barry)