U.S. stocks posted modest gains Friday even as a surprisingly weak jobs report failed to deter investors from taking a broader view that the economy is improving.  Analysts’ upgrade of General Electric and Amazon.com helped the market keep its head above water as many on the Street averred the worst for the labor market was over.  Although the unemployment rate – at its highest level in 26 years – aggravated concerns about consumer spending, it nevertheless reassured some investors that the Federal Reserve will keep interest rates near historically low levels in the near future.      

On Friday, the Dow Jones industrial average rose 17.46 points, or 0.2%, to 10,023.42 and the Standard & Poor’s 500 index added 2.67 points, or 0.3%, to 1,069.30.  The Nasdaq composite index advanced 7.12 points, or 0.3%, to 2,112.44.  For the week, the Dow and the S&P 500 index advanced 3.2%, while the Nasdaq rose 3.3%. 

On the New York Stock Exchange, 1.1 billion shares exchanged hands Friday as advancing shares narrowly edged ahead of those that declined in price.  Surprisingly, as investors’ apprehension in front of the key economic and earnings data grew, the CBOE volatility index declined over 20%, closing at 24.19 on Friday.

Analyst upgrades helped a number of stocks Friday.  Analysts at Bernstein raised their ratings on both General Electric (NYSE:GE) and Amazon.com Inc. (NASDAQ:AMZN) to “outperform,” sending shares in those companies up 6.2% and 4.6%, respectively, and helping give major averages a lift.  General Electric, which also received a rating upgrade from Oppenheimer, was the leading gainer in the Dow average as analysts saw reduced risks to its finance unit.  Lowe’s Cos (NYSE:LOW) jumped 4.3% and Home Depot (NYSE:HD) added 1.8% after analysts at Bank of America Corp. (NYSE:BAC) raised the two companies to “buy” from “underperform.”

The coming week, though devoid of any substantial economic event, does contain a number of corporate posts that are likely to give an indication about the health of the consumer as markets enter the key holiday season.  Disney (NYSE:DIS) and Wal-Mart (NYSE:WMT) report their numbers on Thursday.  Wal-Mart (NYSE:WMT), which has not been posting monthly comparable sales reports, will be watched closely for how the retailer fared during the third quarter.  Kohl’s (NYSE:KSS) also reports on Thursday, with Macy’s (NYSE:M) numbers expected on Wednesday and JC Penney’s (NYSE:JCP) on Friday.  Most analysts expect favorable results, as shoppers remain on a bargain hunting spree.  Setting the fire to the latest advance in stocks was the estimate-topping numbers from 80% of the S&P500 firms that have so far reported their numbers.

This morning’s futures suggest stocks are likely to open with gains of at least 1%.  The healthcare package passed the House by the narrowest of margins, with much wrangling still expected before any decision is reached within the Senate.  The G-20 meeting of Finance Ministers promised extended government stimulus measures.  Meanwhile, the Moody’s Investor Services (NYSE:MCO) upgraded its rating on China and Hong Kong to positive from stable.

Zacks Investment Research