Bank stocks rose the most. JPMorgan Chase & Co. jumped 7.3 percent, the most among the 30 stocks in the Dow average. Morgan Stanley and Goldman Sachs Group Inc. gained more than 6 percent.
The government said the unemployment rate fell to 8.6 percent last month, its lowest level in 2½ years. Economists had expected the rate to stay at 9 percent. But a key reason the unemployment rate fell so much was because roughly 315,000 people had given up looking for work and so dropped from the tally of those counted as unemployed.
European stock indexes and the euro rose after German Chancellor Angela Merkel made a speech demanding tougher fiscal discipline in the region. Germany's DAX index closed 1.1 percent higher; France's CAC-40 rose 1.1 percent.
Merkel said the 17 countries that use the euro must quickly restore market confidence by making financial controls stricter. Bond yields for Spain and Italy fell, a sign that investors are becoming more confident in the ability of those countries to pay their debt.
The Standard & Poor's 500 index rose 6, or 0.5 percent, to 1,251. The Nasdaq composite rose 13, or 0.5 percent, to 2,640.
Decisive steps by world leaders to right Europe's teetering economy sent stocks soaring on Wednesday. The Dow rose 490 points, its biggest gain since March 2009 and its seventh-largest one-day point gain in history. The weekly point gain of 812 is the second-biggest for the Dow in its history, following its 946-point gain in October 2008.
This week's strong stock performance is partially a reflection of the market's increased volatility since August, when concerns that Europe's debt was spinning out of control made dramatic stock price swings the norm. Monday broke a 7-day slide for the S&P 500 that took the index down 7.9 percent.
The improvements in the U.S. job market are "another illustration that the US economy is, for now at least, shrugging off the global economic downturn and fears about the collapse of the euro-zone," Capital Economics Chief U.S. Economist Paul Ashworth said in a note to clients.
Merkel and French President Nicolas Sarkozy are meeting Monday to discuss treaty changes that can restore confidence in the euro's future. The talks will culminate in a Dec. 9 summit of EU leaders, where the proposals are expected to be debated and detailed. In corporate news:
- Western Digital Corp. soared 9 percent, the most in the S&P. The data storage provider raised its revenue estimate for the current quarter and said that recovery efforts at its facility in Thailand following massive flooding there were proceeding faster than had been expected.
- Big Lots Inc. slumped 8.7 percent, the most in the S&P 500 index, after the retailer reported a 76 percent plunge in income because of lower margins and a loss related to a newly acquired Canadian business. The company buys overstocked items including food and housewares and sells them at a discount.
- H&R Block Inc. fell 7.5 percent. The country's largest tax-preparation company reported a wider quarterly loss late Thursday. H&R Block also said there was a jump in claims tied to bad loans made by its former subprime mortgage unit.