Stocks extended a modest recovery Friday, but a sharper rebound from Tuesday's selloff unraveled in a fitting conclusion to a volatile week.

The Dow Jones industrial average finished just 20.34 higher at 8,598.02 after retreating from a midday gain of 132 points, closing the week 285.27 lower and 740 points from the record of 9,337.97 set three weeks ago on July 17.Bellwether technology shares also faltered during the afternoon, but a strong showing by smaller-company issues led the Nasdaq market to a second day of big gains.

The blue-chip dominated Standard & Poor's 500 finished a shade lower, surrendering a 13-point gain and slipping 0.18 to 1,089.45.

While the aftershocks of Tuesday's selloff have eased, the ensuing rebound hasn't been very convincing. In three sessions, the Dow has now recovered about 110 of the 299 points lost on Tuesday.

"I will take certain amount of comfort from (the past few days), but I wouldn't say I'm ready to rest in a hammock," said Charles G. Crane, chief market strategist at Cleveland-based Key Asset Management.

"The idea that individual investors apparently are not panicking does give me relief, but they could change their minds next week," Crane said, noting that the Asian backdrop, a key source of anxiety in recent weeks, remains very unstable.

Notably, the Japanese yen plunged in currency trading Friday amid disappointment that Prime Minister Keizo Obuchi offered nothing new in a speech about his plans to revive the economy by cutting taxes and cleaning up debt-ridden banks.

Wall Street had started the day after a new report showing that the U.S. economy remained solid last month despite the continuing drag from Asia's fiscal crisis.

The Labor Department report also showed that wages - which often account for two-thirds of a product's price - rose at a slower pace in July.

The unemployment rate held steady at 4.5 percent, matching June's rate and only slightly higher than the 28-year low of 4.3 percent reached in May. Average hourly earnings rose 3 cents for the third consecutive month, to $12.79. That's smaller than the average monthly increase of 5 cents during the first four months of the year.

The Dow's biggest gainers were J.P. Morgan, up 2 9/16 to 1231/2; Boeing, up 2 3/16 to 391/4; and Exxon, up 2 to 66 15/16.

Advancing issues outnumbered decliners by a 2-to-1 margin on the New York Stock Exchange, where composite volume totaled 891.19 million shares, nearly even with Thursday's hefty tally.

The Nasdaq composite index rose 17.26 to 1,846.77 after gaining 41 points on Thursday, and the NYSE composite index rose 1.70 to 549.50.

The Russell 2000 index of smaller companies rose 9.18 to 415.80, and the small-company dominated American Stock Exchange composite index rose 7.12 to 684.07.

Overseas, Tokyo's Nikkei stock average fell 0.3 percent, Frankfurt's DAX index rose 0.8 percent and London's FT-SE 100 rose 1.5 percent.