NEW YORK (AP) – Wall Street extended its advance Friday after the government’s employment report showed signs of continued strength in the job market and eased concerns about an economic slowdown. Bonds fell sharply on reduced expectations the Federal Reserve will need to cut interest rates.

The unemployment rate fell to 4.5 percent from 4.6 percent as U.S. employers added 97,000 nonfarm workers in February, the Labor Department said. The employment gain followed a rise in January that was larger than previously estimated.

Strength in the job market helped calm investors still rattled after last week’s sell-off triggered the biggest weekly loss for U.S. stocks in four years. The much-anticipated jobs report coming in better than expected alleviated fears the economy was slowing faster than expected.

Wall Street has recouped more than a third of its losses since a massive decline in Chinese markets helped send markets plunging around the globe, and slashed about $1 trillion from the value of U.S. stocks. Traders, seeking a bottom to the decline, might have found the direction they were looking for in the jobs report.

In the first hour of trading, the Dow Jones industrial average rose 20.51, or 0.17 percent, to 12,281.21.

Broader stock indicators were also higher. The Standard & Poor’s 500 index was up 1.30, or 0.09 percent, at 1,403.19, and the Nasdaq composite index advanced 3.25, or 0.14 percent, to 2,390.98.

So far this week, the Dow is up 1.6 percent and the S&P has climbed 1.7 percent. The tech-heavy Nasdaq, which last year lagged other major indexes, is up 1.5 percent.

While stocks rose on the jobs report, it led to a steep decline for the bond market. Treasury prices fell sharply as the jobs report made it more unlikely the Fed would cut rates. Though the report was slightly weaker than expected, bond investors had been positioned for an even softer number.

The yield on the benchmark 10-year Treasury note shot up to 4.60 percent from 4.51 percent late Thursday.

Also putting a positive spin on the markets was a Commerce Department report that the trade deficit narrowed slightly in January as U.S. exports rose to an all-time high while imports dropped. This sent a good signal that the nation’s trade imbalances may finally start to improve this year.

The reports helped bolster companies whose businesses hinge on economic strength. Heavy machinery maker Caterpillar Inc. rose 47 cents to $64.77, while aerospace company Boeing Co. added 91 cents to $89.90.

Also trading heavily was New Century Financial Corp., which plunged 68 cents, or 17.6 percent, to $3.19. The troubled subprime lender announced late Thursday it will stop accepting loan applications as some of its financial backers refused to provide access to financing.

Yahoo Inc. tumbled $1.09, or 3.6 percent, to $29.62 after a report said AT&T Inc. wants to scale back its partnership with the Web portal. The move could cut $200 million to $250 million a year for Yahoo, according to the Wall Street Journal.

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