The Dow Jones Industrial Average climbed 0.2 per cent to 11,403.06 in early trading on Friday, in a volatile opening after the release of a better-than-expected US employment report.

The broader S&P 500 was down 0.1 per cent to 1,199.00, while the tech-heavy Nasdaq Composite slumped 0.7 per cent to 2,538.53 after 40 minutes of trading.

Stocks initially rallied more than one per cent, then pared their gains and dipped into the red after the US Labor Department said the country’s economy generated 117,000 jobs in July, cutting the unemployment rate down a notch to 9.1 per cent.

Economists had forecast only a net 84,000 jobs generated.

“The employment report turned out better than expected and certainly better than feared,” said Patrick O’Hare, an analyst with Briefing.com.

However, he also cautioned: “The fact remains that the pace of job growth is still not sufficient enough to produce a meaningful change in the unemployment rate.”

Investors were closely watching the jobs report for signs of whether the world’s largest economy might be slipping back into a downturn, especially after a dramatic sell-off hammered global markets on Thursday.

The Dow fell more than 500 points on Thursday, its sharpest one-day drop since the 2008 financial crisis, amid fears that Europe’s debt crisis was mounting and that the US economy was slowing.