The Dow and the S&P 500 edged lower on Friday from 15-month highs after hopes for a quick turnaround in the labor market were knocked by an unexpectedly weak employment report.

But losses were slight, and analysts said Labor Department data that showed a loss of 85,000 jobs in December was not inconsistent with a slowly recovering economy. In addition, November's payrolls report was revised to a gain in jobs, bolstering that view.

I don't think that we should expect that we're going to go up in a straight line, said Linda Duessel, market strategist at Federated Investors in Pittsburgh. Last month of course was revised up. This one will probably get revised at least in a more positive direction.

Losses were also curbed after shipping company United Parcel Service Inc boosted its fourth-quarter outlook and said it will cut 1,800 jobs. That sent the shares up over 4 percent and lifted hopes of strong corporate earnings when Alcoa Inc kicks off the reporting season on Monday.

The Dow Jones industrial average <.DJI> fell 26.30 points, or 0.25 percent, at 10,580.56. The Standard & Poor's 500 Index <.SPX> dropped 0.72 point, or 0.06 percent, at 1,140.97. The Nasdaq Composite Index <.IXIC> rose 13.18 points, or 0.57 percent, at 2,313.23.

The Nasdaq rebounded on gains in biotechnology companies Teva Pharmaceutical Industries Ltd and Genzyme Corp .

Teva gained 3.6 percent to $58.87 a day after the world's largest generic drugmaker set a revenue target for 2015 of $31 billion, more than double its current annual amount.

Genzyme Corp advanced for a second day after a source said billionaire investor Carl Icahn was considering a proxy battle at the biotech company. Genzyme was up 4.6 percent to $53.48 after a 4.4 percent advance on Thursday.

(Reporting by Edward Krudy; Editing by Kenneth Barry)

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