NEW YORK (CNN/Money) - Stocks remained primed for a higher start Friday even after the release of a weaker than expected March employment report.

Wall Street's focus remained on the war in Iraq, where the latest news still pointed to an quick end of the military campaign. Some 2,500 Iraqi Republican Guards surrendered to U.S. forces overnight and U.S. troops continued to tighten their noose on Baghdad.

Shortly after 8:30 a.m. futures pointed to a higher open for the major indexes.

As has been the case for some time, the concerns abroad distracted investors from the reality of economic weakness at home. Friday was no exception, with the focus on war in the early going taking attention away from the March jobs report.

The economy lost 108,000 non-farm jobs last month, more than three times what economists had expected, but the unemployment rate remained unchanged at 5.8 percent.

For details of Thursday's session, click above

There is some speculation that an especially weak report could push the Federal Reserve toward a rate cut, possibly even before the policy makers meet May 6.

The Dow Jones industrial average goes into Friday's session up by about 95 points for the week, even with Thursday's 0.5 percent loss. The Nasdaq composite index is up by almost 27 points, having gone virtually unchanged Thursday. (see chart for Thursday's activity)

European markets rallied at midday on the Iraq news, while Treasury bonds slid lower, along with gold and oil, as investors turned their attention to equities.

"Stocks popped higher on the back of the U.S. announcement that 2,500 crack Iraqi troops had surrendered," a London-based pan-European equity trader told Reuters.

U.S. forces have taken control of most of Baghdad's main airport and 2,500 Republican Guard soldiers have surrendered, officials said. Yet, even with the rapid progress in the past few days, there's still some concern that forces loyal to the Iraqi regime will use guerrilla warfare and chemical weapons to keep Saddam Hussein in power. (For the latest war news, click here)

However, the news of the large number of soldiers surrendering was greeted with enthusiasm by global traders, as it exacerbated hopes that the war will be over sooner rather than later.

European markets gained at midday on the news, with the pan-European FTSE Eurotop 300 rising 0.7 percent, bouncing off an earlier 0.9 percent drop, while the narrower Dow Jones Euro Stoxx 50 rose 0.9 percent. Among individual sectors, automakers and media were the best gainers.

Asian-Pacific stocks also finished higher Friday, with Tokyo's Nikkei index up 0.7 percent.

Positive stock action was supported by a waning interest in low-yielding bonds, as well as commodities.

Treasury prices dipped in early trading, sending the 10-year note yield up to 3.92 percent from 3.91 percent late Thursday. The dollar continued its recent climb off of its sharp lows in the weeks leading up to war, gaining half a percent against the yen and one-third of a percent versus the euro.

Brent oil futures fell 76 cents to $24.74 a barrel in London. Gold also declined, hovering near four-month lows at $323.75, down from $325.30 late Thursday.

Among U.S. stocks trading in Europe, Alcoa (AA: Research, Estimates) was slightly higher. The nation's largest maker of aluminum will be the first Dow component to report March quarter results Friday, with analysts surveyed by First Call expecting to see a decline in profit to 19 cents a share from 22 cents a share a year earlier.

On the downside, shares of business software maker PeopleSoft (PSFT: Research, Estimates) fell to $14.20 on Instinet, down from a close of $16.50 on the Nasdaq Thursday, after the company warned that its first-quarter earnings and revenue would miss expectations, due to delayed corporate spending in response to the war in Iraq.

Dow stock International Paper (IP: Research, Estimates) edged down to 32.30, or $34.63 from its close of $34.78 Thursday after the world's largest magazine paper maker, Finland's UPM-Kymmene, said its first-quarter profit would be 50 percent lower than it was a year earlier due to low prices and a weak U.S. dollar. The news sent its stock to four-year lows and hit sector peers on both sides of the Atlantic.  

-- Reuters contributed to this report