Stocks are on pace to break a three-week losing streak after an encouraging employment report lifted hopes about the pace of economic growth.

The Dow Jones industrial average added about 72 points in midday trading Friday. Broader indexes also rose. Stocks eased off their highs of the day after a separate report showed that the services sector grew at a slower pace than expected last month.

The jobs reported "created a bit of optimism, but there's still a degree of caution," said Nick Kalivas, vice president of financial research for MF Global. The services sector report renewed some skepticism, Kalivas said.

The Labor Department said private employers added 67,000 jobs in August, more than the 41,000 economists polled by Thomson Reuters had forecast. While the report added a small dose of optimism, it also shows that the economic recovery is still tenuous.

"We need to get that number over 100,000 to feel comfortably that we won't slip back into recession," said Bill Hampel, chief economist for the Credit Union National Association. "We need it over 150,000 to feel confident we have a nice, sustainable recovery."

Investors have received more encouraging reports on the economy over the past three days than they did throughout August, when data regularly fell short of the market's already modest expectations. Reports beginning with Wednesday's manufacturing data touched off a rally at the beginning of September, which is historically a bad month for stocks.

There were other encouraging signs throughout the employment report Friday, including revisions to June and July's reports that showed the economy added more jobs than the government previously said.

Hourly wages also rose more than expected last month. Temporary employment rose as well, which is seen as a sign of future growth. Employers will often hire temporary workers as a recovery takes hold and then eventually take on full-time staff.

More than a half-million Americans resumed their job searches in August. That drove up the unemployment rate to 9.6 percent from 9.5 percent, but it could also be a sign that more people are hopeful about the recovery.

The Dow rose 72.36, or 0.7 percent, to 10,392.38 in midday trading. The Standard & Poor's 500 index rose 8.58, or 0.8 percent, to 1,098.68, while the Nasdaq composite index rose 20.05, or 0.9 percent, to 2,220.06.

About three stocks rose for every one that fell on the New York Stock Exchange, where volume came to 389.4 million shares. Volume is light as many investors left early for the long holiday weekend.

Bond prices fell after the report, sending interest rates higher. The yield on the 10-year Treasury note jumped to 2.72 percent from 2.63 percent late Thursday. Its yield is often used as a gauge to set interest rates on mortgages and other consumer loans.

The Institute for Supply Management said the services sector continued to expand in August, but that growth slowed sharply from the previous month and more than economists predicted. That fits into a trend of relatively weak economic indicators seen throughout August. The services sector, which accounts for 80 percent of jobs in the country, has not recovered as strongly as the smaller manufacturing sector.

ISM said Wednesday that the manufacturing sector expanded in August at a faster pace than economists forecast, which ignited the recent rally. The Dow jumped 3 percent over the past two days.

Overseas markets rallied sharply after the U.S. jobs report. Britain's FTSE 100 climbed 1.1 percent, Germany's DAX index rose 0.8 percent, and France's CAC-40 jumped 1.1 percent. Japan's Nikkei stock average rose 0.6 percent.