* January payrolls disappoint, December revised up slightly
* Apple leads market higher on buyback boost
* Online travel agencies' shares fly after Expedia results
* Spot VIX falls to trade below VIX futures
* Dow up 1.1 pct, S&P 500 up 1.3 pct, Nasdaq up 1.7 pct
By Chuck Mikolajczak
NEW YORK, Feb 7 (Reuters) - U.S. stocks jumped on Friday, giving the S&P 500 its first weekly gain in four as the impact of a weak reading on the labor market was dulled by harsh weather conditions and traders focused on expectations of further economic strength.
Nonfarm payrolls added 113,000 jobs in January - well shy of the forecast for 185,000. December payrolls were revised upward by only 1,000 to 75,000. The U.S. unemployment rate in January hit a five-year low of 6.6 percent, slightly above the 6.5 percent level that Fed officials have said would prompt them to consider raising benchmark interest rates from near zero.
The rapid drop in U.S. unemployment will make re-crafting the Federal Reserve's easy-money promise a top priority for new Chair Janet Yellen, who will probably avoid tying policy to specific targets in the labor market.
Strong job gains in construction hinted that cold weather was probably not a major factor in January job creation. Traders appeared to expect that the January numbers will be revised upward next month. The data also showed job gains in manufacturing.
"The BLS can tell us there was no abnormal weather in this January number, but I've been freezing for two months. I can't believe there was no weather impact to this number," said Phil Orlando, chief equity market strategist at Federated Investors, in New York.
"So intellectually I am sort of discounting that, and saying I'm going to give the employment report a hall pass until we get into the spring."
Concern about recent soft U.S. data added to worries about growth in China and a selloff in emerging market currencies and equities to push stocks sharply lower worldwide in the past few weeks.
Near-term concerns have subsided, however, and the spot price for protection against drops in the S&P 500 is again below front-month contracts, following a brief inversion of that curve. The CBOE Volatility Index fell 11.3 percent to end at 15.29 on Friday after trading above 21 earlier this week. One-month VIX futures slid 9 percent to 15.47.
As investors await a batch of fresh data in the coming month, previous expectations for sustained U.S. economic growth are still supporting stock prices.
The S&P 500 closed above its 14-day moving average, a level it hadn't traded above since Jan. 23. The 2.6 percent gain for the past two sessions marked the S&P 500's best two-day performance in four months.
The Dow Jones industrial average shot up 165.55 points or 1.06 percent, to end at 15,794.08. The S&P 500 gained 23.59 points or 1.33 percent, to close at 1,797.02. The Nasdaq Composite added 68.739 points or 1.69 percent, to finish at 4,125.861.
For the week, the Dow rose 0.6 percent, the S&P 500 gained 0.8 percent and the Nasdaq advanced 0.5 percent.
The S&P 500 fell as much as 6 percent this week from a record closing high set on Jan. 15. Before Friday's gains, the benchmark index was facing its fourth weekly decline in a row - a losing streak not seen since July and August in 2011.
"I'm willing to give the market the benefit of the doubt, particularly with the prices 6 percent lower than they were three weeks ago," Orlando said.
The tech sector got a lift from Apple Inc after the iPhone maker said it bought $12 billion worth of stock via an accelerated buyback program and $2 billion more from the open market in the two weeks since it reported earnings. Apple's stock gained 1.4 percent to close at $519.68.
News Corp Class A shares jumped 8.7 percent to end at $17.41 a day after the publisher of the Wall Street Journal said cost cuts helped push its profit well above analysts' forecasts.
The stock of online travel agency Expedia soared 14.3 percent to $74.45, making it the S&P 500's best performer a day after the company posted a higher-than-expected quarterly profit. Shares of rival Priceline.com added 5 percent to close at $1,195.39. Orbitz Worldwide gained 4.2 percent to $7.43 and TripAdvisor jumped 9.5 percent to $84.45.
Thomson Reuters data showed that of the 343 companies in the S&P 500 that had reported earnings through Friday morning, 67.9 percent have topped Wall Street's expectations, slightly above the 67 percent beat rate for the past four quarters and ahead of the 63 percent rate since 1994.
Bucking Friday's upward trend, shares of LinkedIn fell 6.2 percent to $209.59 after the online network for professionals gave revenue forecasts that were below those of analysts.
Shares of Fairway Group Holdings Corp lost 29 percent to close at $8.12 a day after the upscale grocery store chain posted quarterly results and announced changes in management.
Volume was light, with about 6.09 billion shares traded on U.S. exchanges, below the 6.94 billion average in January, according to data from BATS Global Markets.
Advancing stocks outnumbered declining ones on the New York Stock Exchange by a ratio of more than 3 to 1. On the Nasdaq, more than two stocks rose for every one that fell.