WALL Street stocks rallied from steep losses yesterday as they shrugged off a surprisingly strong employment report that reignited inflation fears.

The Dow Jones industrial average rose 29.92 points to close at 5,697.11, recovering from a plunge of more than 85 points in the first half hour of trading as investors scooped up bargains.

Declines outnumbered advances by a margin of more than 8-to-3 on the New York Stock Exchange, with 671 up, 1,816 down and 657 unchanged.

The Nasdaq composite index fell 5.25 to 1,227.27, and the American Stock Exchange's market value index fell 3.53 to 599.31.