Investors were able to shake off a weaker-than-expected report on the US job market.

The Dow Jones Industrial Average rose 108.32 points (1.03 per cent) to 10,591.17 and the Nasdaq composite climbed 33.21 points (1.68 per cent) to 2,009.93 in the first trades.

The Standard & Poor's 500 index added 18.64 points (1.67 per cent) to 1,132.92.

As markets licked their wounds from a punishing session on Thursday, a positive surprise came from an announcement that Wells Fargo was buying rival Wachovia for US15.1 billion (S$21.93 billion) in stock, ending a government-backed plan for Citigroup to take over Wachovia's banking operations.

Also helping the mood, insurance giant AIG said it was readying a plan to repay a government bailout by selling non-core assets.

Sentiment held despite news that a struggling US economy lost 159,000 jobs in Sept as the weight of the housing collapse and credit crunch hit a broad swath of industries. The unemployment rate held steady at 6.1 per cent.

'Traders brushed aside a larger-than-expected drop in nonfarm payrolls and appeared relieved that the unemployment rate held at 6.1 per cent,' said analysts at Charles Schwab & Co.

'Shares are also receiving an assist from the news that Wells Fargo will acquire Wachovia in an all-stock deal that will not require (government) assistance. -- AFP