US STOCKS-Sun Micro hits Nasdaq; Dow, S&P up on jobs data

(Updates to early afternoon, changes byline)

By Cal Mankowski

NEW YORK, May 2 (Reuters) - The Dow and S&P 500 were up slightly on Friday as data showing employers shed far fewer jobs in April than expected calmed worries about a recession, while the Nasdaq fell following a surprise net loss by business computer maker Sun Microsystems Inc (JAVA.O: Quote, Profile, Research)

A sharp jump in oil prices also weighed on the market. U.S. crude futures rose 3 percent, in part, because of the Labor Department data, which helped to ease fears about weaker U.S. demand for energy.

The loss by Sun, the world's fourth-largest business computer maker, sent its shares down 22 percent, making it the biggest drag on the Standard & Poor's 500 stock index.

The department said 20,000 jobs were shed last month, marking a fourth straight monthly decline, but the cuts were fewer than the 80,000 which economists surveyed by Reuters had anticipated. The unemployment rate fell to 5.0 percent from 5.1 percent, contrary to forecasts of a pickup to 5.2 percent.

"Whether we're in a recession or not in a recession doesn't really matter," said Dan Davidowitz, portfolio manager and analyst at Polen Capital Management in Boca Raton, Florida. "We're certainly in a weak domestic economy right now."

The Dow Jones industrial average .DJI was up 22.88 points, or 0.18 percent, at 13,032.88. The Standard & Poor's 500 Index .SPX was up 2.46 points, or 0.17 percent, at 1,411.80. The Nasdaq Composite Index .IXIC was down 10.09 points, or 0.41 percent, at 2,470.62.

Sun also reported late on Thursday declining revenue and said the U.S. economy posed significant challenges.