S&P, Dow break records after strong jobs report

Traders work on floor of New York Stock Exchange
Traders work on the floor of the New York Stock Exchange on Dec. 5, 2014.

U.S. stocks rose on Friday, lifting the S&P 500 and Dow industrials into uncharted terrain, as investors embraced a stronger-than-forecast November payrolls report as backing the view the economy can handle rate hikes by the Federal Reserve in 2015.

RELATED: Job growth surges

"We're seeing further confirmation that the U.S. economy can stand on its own two feet, that life goes on when the Fed is no longer buying assets," said Jeff Greenberg, senior economist at J.P. Morgan Private Bank.

U.S. employers created 321,000 jobs last month, the largest gain since January 2012, and topped the most cheery estimates.

"It was a great report, there are no two ways about it. The highest estimate I had seen was 275,000," said JJ Kinahan, chief market strategist at T.D. Ameritrade.

The unemployment rate remained unchanged at a six-year low of 5.8 percent, and hourly earnings increased 0.4 percent.

Stock-index futures reversed direction several times in the wake of the data, and benchmark Treasury yields shot higher.

"This report is first reflected in the rates market, and impacted yields quickly, so the shock was there, and that threw the equity markets," said Greenberg.

RELATED: Economic growth stronger than initially predicted

The initial reaction in equities is the market's "futile attempt to say this means the Fed is going to move earlier, and you should see yields trending higher in an improving economy," said Art Hogan, chief market strategist at Wunderlich Securities, referring to the notion that the report could move up the timing of Fed's rate increases. 

Another report Friday had orders for U.S. factory goods falling 0.7 percent in October.

Climbing to an all-time high, the Dow Jones Industrial Average was lately up 70.25 points, or 0.4 percent, at 17,970.35, with JPMorgan Chase and Goldman Sachs Group leading blue-chip gains that included 19 of 30 components.

The S&P 500 advanced 5.28 points, or 0.3 percent, to 2,077.20, with financials pacing sector gains, as higher interest rates would boost bank earnings, and energy performed most poorly among its 10 major industry groups.

Read more at CNBC.com.