NEW YORK (AP) – Stocks rallied Friday as moderating job growth reinforced Wall Street’s hopes that the Federal Reserve may soon end its series of interest rate hikes. The Dow Jones industrial average climbed more than 110 points to a fresh six-year high.

Investors saw a slowdown in April employment growth as the latest sign of a softening economy, a reason for the Fed to stop raising interest rates. That countered worries over rising wages, which followed an upswing in employers’ labor costs on Thursday.

Jack Caffrey, equities strategist for JPMorgan Private Bank, said the market appeared to be focusing on recent positive data instead of considering the long-term consequences of why the Fed would stop boosting interest rates _ because economic growth has slowed enough to contain inflation.

“People are taking the weaker job creation, the stability in the unemployment rate and the uptick in jobless claims and spinning that into a hope the Fed will move to the sideline sooner than later,” Caffrey said. “It’s almost a hope-for-relief rally instead of a ‘the Fed is done, things are slowing down’ mentality.”

Falling oil prices also helped stocks to their gains, although some believe higher gasoline prices will pressure consumer spending and keep the economy from overheating.

In midafternoon trading, the Dow climbed 112.46, or 0.98 percent, to 11,551.32, about 170 points away from its all-time high of 11,722.98, reached Jan. 14, 2000.

Broader stock indicators were higher. The Standard & Poor’s 500 index was up 10.85, or 0.83 percent, at 1,323.10, its highest level since February 2001; the Nasdaq composite index advanced 15.63, or 0.67 percent, to 2,339.53.

Advancing issues led decliners by a robust 3 to 1 margin on the New York Stock Exchange, where volume of 1.06 billion shares trailed the 1.13 billion shares changing hands at the same point Thursday.

The light trading volume was indicative of the market’s ongoing uncertainty about interest rates and whether stocks can push upward, said Christopher Piros, director of investment research for Prudential’s Strategic Investment Research Group. Meanwhile, the jobs data left the inflation riddle unanswered, he said.

“We are at a point where inflation expectations are still rising, and the Fed is faced with a dilemma of whether they’ve done enough to cap inflation, but not enough to roll over the economy,” Piros said. “I haven’t seen real signs of a pickup in core inflation, although it’s been ticking up slowly.”

The Labor Department said U.S. employers added 138,000 jobs in April, far less than estimates for a 200,000 gain. Average hourly earnings meanwhile jumped 0.5 percent, above the consensus target of 0.3 percent. The unemployment rate held steady at 4.7 percent.

Bonds recouped recent losses, with the yield on the 10-year Treasury note falling to 5.11 percent from 5.15 percent late Thursday. The U.S. dollar sank against the Japanese yen and was flat against European currencies, while gold prices topped $680 per ounce.

Crude futures edged up following a three-day decline spurred by government data showing improving supplies of gasoline and flat motor fuel demand. A barrel of light crude added 6 cents to $70 on the New York Mercantile Exchange.

Warner Music Group Corp. reported a loss for the latest quarter amid declining revenue from its music publishing business. However, record music sales rose 9 percent, led by a threefold jump in digital sales. Warner Music’s stock rose 36 cents to $29.10.

Medco Health Solutions Inc. posted a 66 percent slide in first-quarter profit, hurt by a $100 million charge to settle three legal matters. Medco nonetheless rose $2.42 to $53.19.

Luxury homebuilder Toll Brothers Inc. rose 86 cents to $30.50 despite saying its signed contracts tumbled 29 percent last quarter and lowering its forecast for full-year home deliveries.

The Russell 2000 index of smaller companies added 7.70, or 0.99 percent, to 782.42. The index crossed 700 points for the first time in early January and has continued pushing to new all-time highs in 2006.

Japan’s markets were closed Friday for a national holiday. Britain’s FTSE 100 rose 0.91 percent, Germany’s DAX index surged 1.22 percent and France’s CAC-40 was higher by 1.01 percent.

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