NEW YORK – U.S. stocks finished well off earlier lows Friday, leaving intact strong weekly gains, as investors reassessed news of worse-than-expected job losses in July amid hopes that the Federal Reserve might next week hint at new steps to boost the economy.

The Dow Jones industrial average fell 21.42 points, or 0.2 percent, to end at 10,653.56. The blue-chip index recovered much of a 160-point morning drop to gain 1.8 percent during a week of light volumes.

Investors piled into Treasurys after release of the government’s monthly jobs data, pushing the yield on the 10-year note to its lowest level in more than a year.

Also weighing Friday was a decline in consumer credit amid increased saving by American households. Consumer credit outstanding fell 0.7 percent in June, while the national savings rate rose to 6.4 percent from 6.3 percent in May, the Federal Reserve said in a report late Friday.

The jobs report, which showed nonfarm payrolls fell by a larger-than-expected 131,000 last month, added to a stream of economic data over recent weeks that indicate the American recovery continues to weaken, and stoked fears the country could still fall back into a recession.

“We were hoping for good news, and we just didn’t get it,” said Maris Ogg, president of Tower Bridge Advisors.

Stocks are near historical lows in terms of valuation, “but it’s hard for me to see how we get much outside this trading range with the uncertainty we have out there,” she said, pointing to the jobs outlook and congressional uncertainty over extending tax cuts.

Compounding worries is that consumer spending, which makes up 70 percent of economic activity, could further erode.


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