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Late in the day, stocks gainedafter reports that Federal Reserve Chairman Ben Bernanke said in a CBS television interview recorded on November 30 that he does not rule out more than the announced $600 billion in Fed asset purchases. The interview with "60 Minutes" has yet to be televised.

The S&P 500 rose 3 percent this week, as investors were reassured by signs the economy is stabilizing and have taken a more optimistic view of Europe's debt crisis. This has helped push the S&P 500 close to a new two-year high. The Nasdaq rose to nearly a three-year high.

"We're within 5 to 6 points on the S&P of brand-new recovery cycle highs," said Jim Paulsen, chief investment officer at Wells Capital Management, in Minneapolis. "If it does break through, there is a lot of room to the upside."

Despite a modest day for major averages, the PHLX Semiconductor Index .SOX and the Dow Jones Transportation Average.DJT touched 52-week highs, a positive sign as both are viewed as market bellwethers.

Paulsen said the jobs number was such an outlier that it did not shake investors' new-found confidence in the economic recovery.

"The economic momentum is not doused by what we got this morning," he said. But he added, "If data reports start going weak in the next few weeks, then this jobs number is going to get a lot more attention."

Volume was at its lowest level this week, according to early data, and was well below its daily average so far this year.

But the market's breadth was overwhelmingly positive on both the New York Stock Exchange and the Nasdaq, where about eight stocks rose for every five that fell.

The Dow Jones industrial average .DJI rose 19.68 points, or 0.17 percent, to end at 11,382.09. The Standard & Poor's 500 Index .SPX added 3.18 points, or 0.26 percent, to 1,224.71. The Nasdaq Composite Index .IXIC gained 12.11 points, or 0.47 percent, to close at 2,591.46.

On Friday, the Nasdaq finished at its highest level since early January 2008.

ALCOA AND BANKS RISE, VIX FALLS

Commodity-related shares benefited from a weaker dollar, which declined after the jobs report. Aluminum company Alcoa Inc (AA.N) gained 1 percent to $14.22.

Financials, which had their biggest day in three months on Thursday, extended gains late in Friday's session. The KBW bank index .BKX rose 0.8 percent.

Employment barely grew in November. Nonfarm payrolls rose by only 39,000, much weaker than the 140,000 new jobs that economists forecast. The U.S. unemployment rate unexpectedly jumped to a seven-month high of 9.8 percent, the Labor Department said.