The nonfarm payrolls report released ahead of the open Friday showed creation 242,000 jobs in February, topping expectations. The unemployment rate unchanged at 4.9 percent, while labor force participation was 62.9 percent.
"I think it's a good jobs report. Given where expectations are for the second half of the year for earnings, you need economic growth more than you need the Fed to sit on the sidelines," said Jeremy Klein, chief market strategist at FBN Securities.
"We've had a massive run over the last few weeks. Today I would not be surprised to see some profit-taking ahead of the weekend," he said, also noting some anticipation of the European Central Bank meeting later next week.
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One concerning aspect of the emplolyment report was a 0.1 percent monthly drop in average hourly earnings. That lowered the year-on-year gain in earnings to 2.2 percent, Reuters said.
"The economy is good, also however, there's no wage inflation, which puts the Fed out of the picture," said Zhiwei Ren, managing director and portfolio manager at Penn Mutual Asset Management.
"Today's combination is a perfect combination for the equity market," he said.
The employment report also helped oil gain, with U.S. crude oil futures breaking above resistance to settle up $1.35 at 3.91 percent, at $35.92 a barrel. WTI gained 9.58 percent for the week, its best week since August and its first three-week winstreak since May 2015.
Peter Coleman, head trader at Convergex, attributed much of a morning rise in stocks to the climb in oil prices. "In general, people think we've put in a bottom at $25 in oil and people just putting some money to work in the beaten-up energy and commodities stocks," he said.
Materials gained more than 1 percent as the top S&P 500 advancer, followed by utilities and energy.
Copper gained 7 percent for the week, its best since December 2011, and was up 6 percent for the year so far.
The Atlanta Fed's GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the first quarter rose to 2.2 percent from 1.9 percent after the jobs report.
"Anyone worried about U.S. recession should be less worried about that now," said Luke Bartholomew, investment manager at Aberdeen Asset Management.
As of intraday trade Friday, Fed funds futures were pricing in a 67 percent chance of a December rate hike, up slightly from about 60 percent in the last few days, according to CME Group's FedWatch tool.
Futures traded little changed just ahead of the open after initially extending gains following the jobs report. Dow futures briefly rose more than 70 points and the S&P 500 e-minis spiked above 2,000 for the first time since Jan. 6.
Treasury yields held higher, with the 2-year yield near 0.87 percent and the 10-year yield at 1.87 percent.
The U.S. dollar index traded about 0.3 percent lower, with the euro near $1.10 and the yen at 113.93 yen against the greenback.
European stocks closed more than half a percent higher, up more than 3 percent for the week. The STOXX Europe 600 Banks gained more than 5.5 percent for its best week since January 2015.
Asian equities also ended higher for the day and the week, with the Shanghai composite up nearly 4 percent for the week and the Nikkei 225 gaining 5 percent.
With Friday afternoon's gains, the Nasdaq composite joined the S&P 500 and Dow within 10 percent of its 52-week intraday high, out of correction territory.
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The Dow Jones industrial average closed up 62.87 points, or 0.37 percent, at 17,006.77, with DuPont leading advancers and Home Depot the greatest laggard.
The index gained 2.2 percent for the week, with Caterpillar the top performer and Nike the worst performer on the week.
The S&P 500 closed up 6.59 points, or 0.33 percent, at 1,999.99, with materials leading seven sectors higher and telecommunications the greatest decliner.
The S&P rose 2.67 percent for the week, with energy rising nearly 5.8 percent to lead all sectors higher on the week.
The Nasdaq composite closed up 9.60 points, or 0.20 percent, at 4,717.02.
The Nasdaq advanced 2.76 percent for the week.
The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, hit its lowest level since Dec. 29 before edging slightly higher to end around 16.8.
About two stocks advanced for every decliner on the New York Stock Exchange, with an exchange volume of nearly 1.4 billion and a composite volume of 6.0 billion.
High-frequency trading accounted for 49 percent of March's daily trading volume of about 8.67 billion shares, according to TABB Group. During the peak levels of high-frequency trading in 2009, about 61 percent of 9.8 billion of average daily shares traded were executed by high-frequency traders.
Gold futures for April delivery settled up $12.50 at $1,270.70 an ounce.
—CNBC's Gina Francolla contributed to this report.
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