The S&P 500 index rose for a fifth straight day on Friday and was headed for its highest close since 2007 while Treasury prices tumbled after the U.S. unemployment rate unexpectedly fell to a near four-year low.
The dollar advanced to a two-week high versus the yen and the euro gained as investors sold the U.S. and Japanese currencies, which are often perceived as safe havens.
The United States added 114,000 jobs last month, driving the jobless rate down to 7.8%, the lowest level since January 2009, the Labor Department reported. Payrolls for both July and August were revised higher.
"The details were about as good as they realistically could be under the circumstances," said Michael Woolfolk, senior currency strategist, at BNY Mellon in New York.
The Dow Jones industrial average gained 58.99 points, or 0.43%, to 13,634.35. The Standard & Poor's 500 Index rose 6.33 points, or 0.43%, to 1,467.73. The Nasdaq Composite Index added 13.77 points, or 0.44%, to 3,163.23.
The MSCI global stock index rose 0.7% to 338.29. Europe's FTSEurofirst 300 index rallied 1% to 1,111.03.
European markets had risen earlier after reassurance from the European Central Bank on Thursday that it stood ready to buy Spain's bonds if the troubled country requested aid. The ECB also said Europe had a "fully effective backstop mechanism in place" to protect the euro.
The ECB envisions buying large volumes of sovereign debt for periods of one to two months once its bond-buying program is triggered, senior central bank sources told Reuters.
The dollar rose to 78.87 yen, the highest since September 19, before pulling back to 78.65 yen, up 0.2% on the day. The euro rose 0.3% to $1.3054.
Safe-haven government bond prices fell. The benchmark 10-year U.S. Treasury note was down 12/32, with the yield at 1.7132%.
"Treasuries sank after the jobs report," said Cary Leahey, economist and senior advisor to Decision Economics in New York.
"Though September job growth was close to expectations, several facets of the report, particularly the large drop in the unemployment rate to 7.8%, suggested that the Fed was closer to the exit window," he said, referring to the Federal Reserve's program of unconventional monetary easing.
Brent futures lost 91 cents at $111.67 a barrel, having fallen by over $1 to $111.48 earlier.
U.S. crude futures eased $1.56 to $90.15 per barrel, after climbing nearly 4% in the prior session.
Gold touched its highest level since last November, taking a cue from euro strength. Spot gold rose above $1,795 an ounce earlier and last traded at $1,785.
