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U.S. stocks rallied Friday, as investors cheered a much stronger-than-expected jobs report.

The Dow Jones industrial average () gained 157 points, or 1.2%, the S&P 500 () added 19 points, or 1.5%, and the Nasdaq composite () increased 46 points, or 1.6%.

The rally pushed pushed the Dow, up more than 5% in 2012, to its highest level since May 2008. The Nasdaq, up more than 11% for the year, climbed to its highest level since December 2000. The S&P 500 has gained almost 7% this year, and finished at a six-month high.

The rally was sparked by the Labor Department’s monthly jobs report, which showed that the U.S. economy added 243,000 jobs in January, far exceeding expectations. The unemployment rate dropped to 8.3%, the lowest since February 2009.

Economists surveyed by CNNMoney had expected the government to report an increase of just 130,000 jobs in January. The unemployment rate was expected to rise to 8.6%.

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Economists had expected a slowdown in post-holiday hiring, considering that about 40,000 temporary couriers were hired for the holidays alone..

"The jobs data blew away market expectations," noted Marc Chandler, global head of currency strategy at Brown Brothers Harriman, calling it a "monster" jobs report. "This coupled with other recent reports for January, show the year has begun off on a firm note," he added.

Meanwhile, investors were also on the lookout for an official agreement on a debt-reduction plan and a second bailout for Greece. The deal is expected to be near, but negotiations are likely to continue thorough the weekend.

U.S. stocks ended mixed Thursday as investors digested a cautious economic outlook from the chairman of the Federal Reserve.

Economy: Factory orders for December rose 1.1%, slightly below expectations. The January installment of the ISM Services Index hit 56.8, surpassing economists’ expectations for 53.1, and up sharply from the prior month.

Companies: Financial stocks were big gainers in Friday’s rally, with Bank of America’s (, Fortune 500) 5% spike leading the Dow’s gains. Morgan Stanley (, Fortune 500), Citigroup (, Fortune 500) and Goldman Sachs (, Fortune 500) were all up between 3% and 5%.

Shares of Genworth Financial (, Fortune 500) soared 14% after the mortgage insurer swung to a fourth-quarter profit.

Tyson Foods (, Fortune 500) shares rose after the company reported better-than-expected earnings and issued slightly upbeat guidance.

Estee Lauder (, Fortune 500) reported a 15% profit increase for its fiscal second quarter to $597 million, but its stock tumbled as the company’s guidance for the current quarter came in short of analyst expectations.

Shares of Gilead Sciences (, Fortune 500) spiked after the company posted fourth-quarter earnings that rose almost 6% from a year ago.

Edwards Lifesciences’ () stock dropped as earnings fell and the company gave a lackluster forecast for the current quarter.

Zynga () shares continue to rise, after Facebook’s IPO revealed the gamemaker accounted for 12% of its revenue in 2011.

Facebook IPO shrinks private trading market

Research in Motion () shares dipped after the BlackBerry-maker said it will give its tablet, the BlackBerry PlayBook, out to Android developers in exchange for their apps.

Trading in shares of Micron Technology (, Fortune 500) was halted after the company announced that its CEO and chairman Steve Appleton died Friday morning in a small-plane crash in Boise.

Currencies and commodities: The dollar slipped against the euro and the British pound, but rose versus the Japanese yen.

Oil for March delivery rose $1.48 to settle at $97.84 a barrel.

Gold futures for April delivery fell $19 to settle at $1,736.80 an ounce.

Bonds: The price on the benchmark 10-year U.S. Treasury fell, pushing the yield up to 1.95% from 1.82% late Thursday.

World markets: European stocks ended sharply higher. Britain’s FTSE 100 () rose 1.8%, while the DAX () in Germany jumped 1.7% and France’s CAC 40 () rose 1.5%.

Asian markets ended mixed. The Shanghai Composite () rose 0.8%, while the Hang Seng () in Hong Kong was flat and Japan’s Nikkei () slipped 0.5%. 

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St. Louis Federal Reserve President James Bullard said on Friday the U.S. economy appears to be gaining momentum that will make further Fed purchases of bonds unnecessary.

“The economic news and economic data, including today’s data, has been surprising to the upside,” Bullard said in a Bloomberg News interview. “I need to see significant deterioration in the economy and some threat of deflation or inflation moving significantly below our inflation target before I would consider more” central bank stimulus, or quantitative easing, he said.

The government earlier in the day said employers added 243,000 jobs in January and that the jobless rate dipped to 8.3 percent, a three-year low.

Bullard, who does not have a vote on the Fed’s policy-setting Federal Open Market Committee this year, is seen as a policy centrist.

The Fed last month said it would likely hold interest rates at rock bottom levels until late 2014. Fed Chairman Ben Bernanke was cautious about recent improvement in the U.S. economy and left the door open to new bond purchases to boost growth.

The Fed cut rates to near zero more than three years ago and has bought $2.3 trillion worth of bonds to spur economic activity.

Bullard said economic conditions are different now than when the Fed launched its last bond buying initiative in late 2010. At that time, inflation was so low policymakers were concerned the economy was at risk of tipping into a dangerous deflationary spiral, but that is not now the case, Bullard said.

“Inflation is coming down but at least for now it is above our inflation target” of 2 percent, he said. “We will see how things develop. But I am also more bullish on the economy as a whole. I do think we have momentum coming out of 2011.”

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The Senate unanimously approved tough new sanctions on Iran’s Central Bank amid fears of Tehran developing a nuclear weapon.

The 100-0 vote Thursday was for an amendment to the defense bill. Lawmakers had argued that concerns about a nuclear-armed Iran outweighed reservations about driving up oil prices and hurting Americans at the gas pump.

Sens. Bob Menendez of New Jersey and Mark Kirk of Illinois offered the amendment that would target foreign financial institutions that do business with the Central Bank of Iran, barring them from opening or maintaining correspondent operations in the United States easy payday loans. It would apply to foreign central banks only for transactions that involve the sale or purchase of petroleum or petroleum products.

Administration officials cautioned that driving up oil prices could mean more money for Iran.

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In nearly every category from real estate loans to small business loans to consumer loans, banks in the St. Louis area are lending less than a year ago, according to data released from the Federal Reserve Bank of St. Louis.

Some borrowers are sitting on the sidelines waiting for the economy to improve before they expand their businesses. Construction and industrial, or C&I, loans, which go to pay for equipment upgrades and inventory, fell in the third quarter to $3.3 billion, down from $3.6 billion a year ago. Many banks in the St. Louis area have targeted growing C&I loans to replace construction and land development loans, which had high default rates during and following the recession payday loans direct lenders.

Small business loans have also declined, to $3.6 billion in the third quarter, down from $3.9 billion a year ago.

“At this point, so much is dependent on confidence in the economy, and demand for loans is flat,” Stackhouse said. “Businesses don’t want to gear up until (consumer) spending is up.”

Not all banks are seeing slowdowns in loan activity. Clayton-based Enterprise Bank & Trust grew its loans, both organically and through acquisitions, with its fastest growth category in C&I loans.

“Overall, most business owners are careful about adding more people or equipment, but some segments are growing, such as health care and manufacturing,” said Enterprise Bank & Trust’s Chief Executive and President Stephen Marsh.

Nonperforming loans, or those that are at least 90 days past due, totaled $855 million for all St. Louis-chartered banks in the third quarter, down from $1.1 billion a year ago. Banks are also setting aside less for loan loan provisions, which fell to $545.1 million in the third quarter compared to $614.3 million a year ago.

“Credit quality is a slow, steady improvement,” Marsh said.

Another positive trend is that profitability is improving. Banks chartered in the St. Louis area had a combined profit of $104. 8 million for the year through Sept. 30, compared with a $50 million loss in the same time period last year. Of the 10 largest locally chartered banks, only two posted a loss for the first nine months of the year, First Bank and Reliance Bank.

First National Bank of St. Louis posted a $14.6 million profit for the first nine months of the year, up 8 percent from the comparable period a year earlier.

“Our customer base has seen some improvement in their businesses in the last 12 months, but this is still the worst economic downturn I’ve seen in 35 years,” said President Rick Bagy.

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Disarming former Libyan rebels could take months and weapons will not be taken by force, Libya’s new prime minister said in an interview broadcast Friday, signaling a shift from previous pledges of quick action.

Abdurrahim el-Keib also acknowledged that the National Transitional Council, which is to lead Libya to its first free election within eight months, has not yet established full control over the country, but said it is making progress. The NTC declared Libya liberated on Oct. 23, three days after the capture and killing of dictator Moammar Gadhafi.

The proliferation of armed ex-rebel militias in Libya and the NTC’s still shaky grip have raised concerns about growing instability during the transition period, which is to end with the election of a national assembly by June.

Thousands of civilians across Libya took up arms during the eight-month war that brought down Gadhafi. Some have returned to their pre-war lives, but others have remained in their fighting units, manning checkpoints and patrolling streets. In recent weeks, there have been reports of fighters using weapons to settle personal scores.

El-Keib, who will run the interim government for the next eight months, told France24 radio Friday that collecting those weapons “is going to take some time.”

“We will not force people to take quick and hasty decisions and actions and come up with some laws that just prevent people from holding arms,” he said. Instead, the government will try to work with the fighters, by offering alternatives, including training and jobs, he said.

“Hopefully, before the eight months end, we will be able to have those armed freedom fighters lay down their arms and go back to their business,” he added.

The head of the NTC, Mustafa Abdul-Jalil, said earlier this week that Libya’s interim leaders need quick access to billions of dollars in Gadhafi regime assets, frozen by a number of countries since the start of the war, to be able to disarm fighters and secure weapons.

Citing lack of funds, Abdul-Jalil said his government can’t do much in the interim period to secure weapons sites and munitions depots that were left unguarded and exposed to looting during the war. Libya border officials have reported heavy weapons smuggling into Egypt, and Israel has said some of those arms have reached the Hamas-ruled Gaza Strip.

Earlier this week, Libyan officials said they discovered chemical weapons that had previously not been declared by the Gadhafi regime when it pledged to abandon the pursuit of non-conventional weapons.

In the Netherlands, the organization that oversees the global ban on chemical weapons said it will work with Libyan authorities to verify and destroy chemical weapons. The Organization for the Prohibition of Chemical Weapons said it was told earlier this week of suspected chemical weapons caches beyond the stockpiles earlier declared by Gadhafi.

The organization said Friday that none of Gadhafi’s known chemical arsenal was plundered during the civil war. Libya declared in 2004 it had tons of sulfur mustard and other chemicals used to make chemical weapons.

Germany’s chancellor says she would support a Europe-wide move to recapitalize banks across the continent if such a moves was deemed necessary.

Angela Merkel said “if there is a common view that banks aren’t sufficiently capitalized for the current market condition” a financial firewall should be built.

The comments come after the International Monetary Fund called on Europe to put up billions of euros to recapitalize Europe’s biggest banks.

Merkel said “common guidelines” on the right amount of capitalization were necessary, adding that this needed to be done urgently. She was speaking in Brussels Wednesday after a meeting with European Commission President Jose Manuel Barroso.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.

BRUSSELS (AP) _ The International Monetary Fund, a key player in eurozone bailouts, on Wednesday pushed for radical changes in the way the region’s debt crisis should be handled.

Antonio Borges, the head of the IMF’s Europe program, said the eurozone’s bailout fund should get more firepower and new tools.

To help, he said the IMF could intervene in bond markets to keep the crisis from engulfing large economies like Italy and Spain. The surprise proposal would profoundly alter the fund’s role in the crisis.

It has so far contributed close to euro80 billion ($105 billion) to eurozone bailouts, about a third of the total, but never intervened in open markets.

“We have a whole set of options that could be put on the table to restore confidence in those countries,” Borges said at a news conference in Brussels.

His comments are the first open acknowledgment of a radical change in approach by the IMF to the eurozone’s debt crisis. The currency union’s debt troubles have intensified severely as most investors expect a default by Greece and fear much larger Italy and Spain will be dragged into the crisis.

In public statements until now, IMF officials had insisted on agreements made at a eurozone summit in July, which gave a first range of new powers to the region’s bailout fund and tentatively offered a second, euro109 billion bailout for Greece, with modest losses accepted by banks on their Greek investments.

But Borges made clear on Wednesday that those decisions were no longer sufficient.

He said that the euro109 billion figure was an estimate based on conditions that have since changed, adding that a new program needed bigger focus on Greece’s massive debt and growth. He said that didn’t necessarily entail bigger losses for banks and other private Greek bond holders.

Borges also piled pressure on Greece to take more stringent measures to get its economy back on track, saying there was no rush to take a decision on the payment on the next slice of bailout money because the country doesn’t face a big bond repayment deadline until December.

Athens has said it will start running out of money to pay salaries and pensions in mid-November if it doesn’t get the euro8 billion ($11 billion) installment of its first euro110 billion ($145 billion) bailout.

The increasing uncertainty over Greece’s fate have increased market volatility and destabilizing the banking sector. Belgium and France are fighting for the survival of Dexia, the first potential failure of a big European bank since the credit crunch of 2008.

To build confidence, Borges backed a push to boost the impact of the eurozone’s bailout fund by using its resources more creatively.

In a new report on Europe released at the same time as the press conference, the IMF said the eurozone should consider using its crisis tools to guarantee bond issues from struggling countries. It also said eurozone countries should commit to indemnify the European Central Bank against possible losses on purchases of shaky government bonds it has made so far.

Both these moves have been discussed as part of a plan to bolster the effectiveness of the euro440 billion ($580 billion) bailout fund, the European Financial Stability Facility.

Borges said the IMF is ready to help Europe support struggling Italy and Spain as soon as all countries have ratified the changes to the EFSF agreed in July.

For instance, the IMF could help the eurozone’s bailout fund to support the distressed bond markets in Italy and Spain by buying their bonds on the open market alongside the EFSF. The fund could also give the two countries precautionary credit lines, he added.

He said Europe needs to take coordinated action on its banks to restore confidence in the financial sector. The IMF has previously said that it may cost as much as euro200 billion to recapitalize lenders across the continent.

“We are not saying that banks are in trouble and we are not saying that banks are weak,” Borges said, but he stressed that there was a big crisis of confidence that could only be addressed through action at European level.

In its report, the IMF says the EFSF should be empowered to directly recapitalize banks.

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The world is not an easy place in which to invest these days. To make any headway, investors must exhibit the patient determination of an explorer such as Marco Polo.

“There are really no bright spots, but you can find values,” asserted Daniel O’Keefe, lead portfolio manager of Artisan Global Value Investor Fund (ARTGX). “The greatest times to invest are during periods of greatest uncertainty, which, while not psychologically comfortable, is the way it works low interest rate personal loans.”

The current global environment should not alter anyone’s long-term investing strategy, O’Keefe said. Given current stock valuations and the cleaner balance sheets of most companies, over a reasonable period of time you are going to do well investing globally, he predicted.

“We own shares of two European banks

A tropical storm watch has been issued for Bermuda as Tropical Storm Maria crawls up the Atlantic.

Early Tuesday, Maria has maximum sustained winds near 50 mph (85 kph) with some strengthening forecast during the next two days.

Maria is centered about 340 miles (545 kilometers) east of the southeastern Bahamas and is moving north-northwest near 5 mph (7 kph) payday loans. The U.S. National Hurricane Center in Miami says Maria is expected to pass west of Bermuda on Thursday.

Maria’s forecast track shows it curving away from the U.S.

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As the world commemorates the 10th anniversary of the World Trade Center attacks, Sunday is doubly significant for Japan. It marks six months since the massive earthquake and tsunami on March 11, a date now seared in the national consciousness.

Up and down the hard-hit northeast coast, families and communities came together to remember victims. Monks chanted. Survivors prayed. Mothers hung colorful paper cranes for their lost children.

At precisely 2:46 p.m., they stopped and observed a minute of silence. March 11 changed everything for them and their country.

The magnitude-9.0 earthquake produced the sort of devastation Japan hadn’t seen since World War II. The tsunami that followed engulfed the northeast and wiped out entire towns. The waves inundated the Fukushima Dai-ichi nuclear power plant, triggering the worst nuclear accident since Chernobyl.

Some 20,000 people are dead or missing. More than 800,000 homes were completely or partially destroyed. The disaster crippled businesses, roads and infrastructure. The Japanese Red Cross Society estimates that 400,000 people were displaced.

Half a year later, there are physical signs of progress.

Much of the debris has been cleared away or at least organized into big piles. In the port city of Kesennuma, many of the boats carried inland by the tsunami have been removed. Most evacuees have moved out of high school gyms and into temporary shelters or apartments.

The supply chain problems that led to critical parts shortages for Japan’s auto and electronics makers are nearly resolved. Industrial production has almost recovered to pre-quake levels.

But beyond the surface is anxiety and frustration among survivors facing an uncertain future. They are growing increasingly impatient with a government they describe as too slow and without direction.

Masayuki Komatsu, a fisherman in Kesennuma, wants to restart his abalone farming business.

But he worries about radiation in the sea from the still-leaking Fukushima plant and isn’t sure if his products will be safe enough to sell. He said officials are not providing adequate radiation information for local fisherman.

“I wonder if the government considers our horrible circumstances and the radiation concerns of people in my business,” said Komatsu, who also lost his home.

Another resident, 80-year-old Takashi Sugawara, lost his sister in the tsunami and now lives in temporary housing. He wants to rebuild his home but is stuck in limbo for the time being.

“My family is not very wealthy, and I only wish that the country would decide what to do about the area as soon as possible,” Sugawara said.

He might be waiting for a while. The Nikkei financial newspaper reported this week that many municipalities in the hardest-hit prefecture of Miyagi, Iwate and Fukushima have yet to draft reconstruction plans.

Of the 31 cities, towns and villages severely damaged by the disaster, just four have finalized their plans, the Nikkei said. The scale of the disaster, the national government’s slow response and quarrels among residents have delayed the rebuilding process.

The Red Cross also expressed frustration over the layers of bureaucracy that delayed distribution of assistance to victims.

“The speed and scope of implementing the response during the emergency phase was not as swift and comprehensive as (the Red Cross) wished, partly due to the structure of disaster management in Japan, partly because of insufficient preparedness,” it said in a six-month report.

Criticism of the government’s handling of the disaster and nuclear crisis led former Prime Minister Naoto Kan to resign. Former Finance Minister Yoshihiko Noda took over nine days ago, becoming Japan’s sixth new prime minister in five years.

He spent much of Saturday visiting Miyage and Iwate prefectures, promising more funding to speed up recovery efforts and trying to shore up confidence in his administration.

But the trip was overshadowed later in the day by his first big political embarrassment. Noda’s new trade minister Yoshio Hachiro resigned, caving into intense pressure after calling the area around the nuclear plant “a town of death,” a comment seen as insensitive to nuclear evacuees.

Public support for the new government started out strong, with an approval rating of 62.8 percent in a Kyodo News poll released last Saturday. Hachiro’s resignation will likely translate into a drop and new doubts about Noda’s ability to lead.

On Sunday, he apologized for hurting the feelings of Fukushima residents.

“I continue to believe that without a revival in Fukushima, there will be no revival of Japan,” Noda said.

Regardless of politics, what’s clear is that the road ahead will be long.

“Given the enormous scale of the destruction and the massive area affected, this will be a long and complex recovery and reconstruction operation,” Tadateru Konoe, the Red Cross president, said in a statement. “It will take at least five years to rebuild, but healing the mental scars could take much longer.”

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