The Dow Jones industrial average crossed 15,000 for the first time early Friday, and the Standard and Poor's 500 index, a broader market measure, broke through 1,600 for the first time.
Shortly after 1 p.m. Eastern Daylight Time, the Dow had given up some of its early gain but was still up 170 points to 15,001, an increase of 1.1 percent. The S&P 500 index surged 19 points, or 1.2 percent, to 1,617.
The surge in U.S. hiring comes after weeks of conflicting signals about the strength of the global economy and the stock market's rise. The unexpectedly strong numbers gave investors new confidence, and eased some of their earlier concerns.
The government said U.S. employers added 165,000 jobs in April, more than economists were expecting. It also said more jobs were created in February and March than it had estimated earlier. The unemployment rate also fell to 7.5 percent, the lowest in four years, from 7.6 percent the month before.
"We're breaking through psychological barriers and that will continue to bring investors off the sidelines," said Darrell Cronk, regional chief investment officer for Wells Fargo Private Bank. He called the jobs news "wonderful."
When the jobs numbers were announced at 8:30 a.m., stock-market futures surged and price of crude oil quickly jumped as traders anticipated a pickup in the economy and rising demand for energy. Oil rose $1.68 to $95.68 a barrel.
The yield on the benchmark 10-year Treasury note jumped from its lowest level of the year, as traders moved money out of the safety of government bonds. The yield rose to 1.73 percent from 1.63 percent late Thursday.
The stock market gains were led by companies that stand to benefit most from an upturn in the economy. Industrial companies, those that make basic materials, and produce oil and gas rose the most in the S&P 500 index. Utilities, consumer-staple companies and other safe-play stocks trailed the market as investors took on more risk.
Small-company stocks are more risky than bigger companies but can also offer investors greater returns. On Friday, they rose at nearly double the pace of the broader market. The Russell 2000 was up 2 percent at midday, much more than the S&P 500, which tracks large company stocks.
The Nasdaq composite index gained 47 points to 3,387, an increase of 1.4 percent.
First came news of falling retail sales in March, then a series of weak manufacturing reports and signs of an economic slowdown in China.
The first-quarter earnings season has been mixed, too. Though earnings have been higher than expected, many companies have reported little or no revenue growth, which has spooked investors.
Investors have also worried that higher Social Security payroll taxes and sweeping government spending cuts that took effect earlier this year will slow U.S. economic growth, and hurt on corporate profits.
Friday's jobs numbers suggested the private sector might be strong enough to overcome those various obstacles.
In its report, the government revised its previous estimate of job gains up to 332,000 in February and 138,000 in March. The economy has created an average of 208,000 jobs a month from November through April — above the 138,000 added in the previous six months.
Among other stocks making big moves:
— Gilead Sciences jumped $3.30 to $55.47, a gain of 6 percent. The maker of HIV drugs reported a 63 percent surge in income in the first quarter thanks to lower costs and increased sales.
— Kraft Foods rose $3.43 to $53.95, an increase of 7 percent. The food maker reported first-quarter income and revenue that beat the forecasts of Wall Street analysts as it increased sales and cut costs following its split from its global snack business.
— LinkedIn, the professional networking social media site, sank 10 percent, losing $20.30, to $181.27. The company issued a revenue forecast for the rest of the year that was well below what financial analysts were expecting. LinkedIn went public in May 2011 at $45 a share.
The S&P 500 is up 13 percent from the start of the year. The Dow is up 14 percent.
Stock overseas rose on U.S. jobs report, too. The main indexes in France, Germany, Spain and Brazil rose 1 percent of more. Markets in Japan were closed for a public holiday.