Stocks had been falling this week after a series of positive economic reports made investors worry that the Fed would soon pull back on its $85 billion in monthly bond purchases, which have kept long-term interest rates low and supported the stock market.
Now that hiring is showing consistent strength, investors appear to be letting go of their earlier worry that the economy isn't ready for the Fed to start weaning the U.S. off that stimulus.
"The jobs report was outstanding," said Randy Frederick, a director of trading and derivatives at Charles Schwab. "It's refreshing to see the markets react positively, because we've been in a mode for so long, of 'good news is bad news.'"
Employers added 203,000 jobs last month after adding 200,000 in October, the Labor Department said Friday. November's job gain helped lower the unemployment rate to 7 percent from 7.3 percent in October.
The Standard & Poor's 500 index rose 16 points, or 0.9 percent, to 1,801 as of 3:40 p.m. Eastern time. The Dow Jones industrial average was up 186 points, or 1.2 percent, to 16,008. The Nasdaq composite climbed 24, or 0.7 percent, to 4,057.
All 10 sectors in the S&P 500 index rose. Industrial stocks were among the leading gainers after Friday's report showed that manufacturers added 27,000 jobs, the most since March 2012.