The government’s latest payroll figures pointed to continuing strength in job creation — a key piece of the economic recovery that had been lagging coming into 2004. With more than 1 million new jobs created in the last three months, investors were reassured on the economy’s ability to continue growing. But while the latest figure was not as high as in previous months, analysts said that wasn’t a bad sign, since faster growth could trigger faster interest rate hikes.

"This is a very Goldilocks number — not too hot or too cold. It was just what we needed," said Chris Wolfe, global head of equities for J.P. Morgan Private Bank. "It lets us contend with the other issues in June with a fairly strong economy behind us."

Those other issues include a likely interest rate hike by the Federal Reserve at the end of the month and the transition of power in Iraq on June 30, Wolfe said.

According to preliminary calculations, the Dow Jones industrial average gained 46.91, or 0.5 percent, to 10,242.82. The index had been more than 100 points higher earlier in the session.

Broader stock indicators also advanced. The Standard & Poor’s 500 index was up 5.87, or 0.5 percent, at 1,122.51, and the Nasdaq composite index rose 18.36, or 0.9 percent, to 1,978.62.

For the week, the Nasdaq lost 0.4 percent, while the Dow rose 0.5 percent and the S&P 500 was up 0.2 percent.

With the economy on track, most analysts agree the Federal Reserve will raise interest rates by a quarter percentage point at its next meeting on June 29.

In the short term, falling oil prices also contributed to Wall Street’s good mood. The benchmark light sweet crude oil was down 73 cents at $38.55 per barrel on the New York Mercantile Exchange.

Investors were also buoyed by Dow component Intel Corp.’s mid-quarter outlook, issued after yesterday’s session. The technology bellwether said it expects sales for the quarter to come in between $8 billion and $8.2 billion, raising the low end of its previous estimates thanks to strong sales of flash memory chips. Intel was up 73 cents at $28.14.

Computer Associates International Inc. gained 87 cents to $27.17 after announcing that former chairman and chief executive Sanjay Kumar will leave the company altogether. Computer Associates is mired in criminal investigations of its accounting practices.

Advancing issues outnumbered decliners by about 5 to 2 on the New York Stock Exchange, where volume came to 1.11 billion shares, compared with 1.23 billion at the same point Thursday.

The Russell 2000 index of smaller companies gained 5.31, or 0.9 percent, to 567.75.