Specialist Meric Greenbaum, left, and trader Fred DeMarco work on the floor of the New York Stock Exchange last month.
The Dow Jones Industrial Average .DJI rose 337.27 points, or 1.22%, to 28,015.06, the S&P 500 .SPX gained 28.48 points, or 0.91%, to 3,145.91 and the Nasdaq Composite .IXIC added 85.83 points, or 1%, to 8,656.53. Utilities, a safe-play sector, were the only laggard. The Labor Department said its index of producer prices has climbed 2.6 percent over the last 12 months, the smallest increase since January. The report also showed unemployment falling to a 50-year low.
The University of Michigan's preliminary consumer sentiment index for December jumped to 99.2 - a seven-month high - from 96.8 in November, beating most forecasts.
"(The jobs report) certainly contributes to the idea that the US economy is doing better than most folks would give it credit for", said Michael Arone, chief investment strategist at State Street Global Advisors in Boston. "It's a better than we expected set of data, and clearly the market is pricing that in".
Futures tied to the S&P 500 rose 0.6% and had been up 0.2% ahead of the data. It's now within 0.3 percent of its all-time high set on November 27 and up 25.5 percent so far this year.
The S&P index recorded 52 new 52-week highs and no new low, while the Nasdaq recorded 104 new highs and 33 new lows.
The Dow is down 401.63 points, or 1.4%.
All three major United States stock indexes gained ground, hovering within 1 per cent of record highs set last week.
As far as Friday is concerned, market participants will by focussed on USA employment data coming from the Department of Labor at 1330 GMT.
Tammy Abraham out of Chelsea's clash with West Ham
TEAM NEWS : CHELSEA: The Blues will miss the services of Tammy Abraham due to hip injury, Ross Barkley may remain sidelined due to an ankle issue.
Wall Street will be on the lookout for any updates on the U.S.
Meanwhile, China's finance ministry said Friday it is working to waive tariffs on imports of USA soybeans, cotton, corn, sorghum and pork by domestic companies, a measure that could help to facilitate the larger trade agreement with the U.S. "Moreover, the strong employment activity suggests that the economy is in a better spot than previously thought to withstand any potential drag from the US-China trade war and other geopolitical risks in the outlook". The earlier in the week that the value of the farm goods China will buy from the U.S.is still an issue, as trade representatives in China are still pushing for a phaseout of earlier tariffs. "The president has said that if we can not get the enforcement and the assurances, then we will not go forward". "It doesn't mean, to my mind, that all the concerns are off the table". The broader technology sector added 0.9%. Higher rates can slow economic growth, erode corporate profits and make investors less willing to pay high prices for stocks.
Tesla Inc rose 1.7 per cent after revealing it would receive state subsidies for its Chinese-built Model 3 cars. Brazil's Bovespa lost 1.9 percent.
Industrial stocks also notched solid gains.
3M Co advanced 4.3 per cent after Bloomberg reported the company was exploring a sale of its drug delivery systems business, which could fetch about $US1 billion ($A1.5 billion).
Oil prices fell four cents at $58.39 USA a barrel. The report is part of the ride-hailing company's effort to be more transparent after years of criticism over its safety record. The Philadelphia Semiconductor index gained 1.7%.
Gold was down 80 cents to $1,190.70 per ounce.
The dollar fell to 108.55 Japanese yen from 108.74 yen on Thursday.
The euro slipped 0.45% to $1.1054 while the pound sterling was off 0.25% at $1.3126. The S&P 500 was just 0.3% away from hitting an all-time high.