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The Dow edged higher, posting gains for the sixth day in a row and inching deeper into record territory, as economists gave the monthly jobs report a mixed review.
As of 12:40 p.m. ET, the Dow Jones Industrial Average climbed 29.7 points, or 0.21%, to 14359, the S&P 500 gained 2.5 points, or 0.16%, to 1546 and the Nasdaq Composite rose 3.7 points, or 0.11%, to 3236.
The markets are on a roll. The Dow climbed for its fifth day in a row on Thursday, ending in record territory for the third-straight session. The broad S&P 500 is at a five-year high, and only 1.3% off its record close.
The Department of Labor said non-farm payrolls increased 236,000 in February, pushing the unemployment rate down to 7.7% -- the lowest since December 2008 -- from 7.9% in January. Economists were expecting an increase of 160,000 jobs with the rate holding steady at 7.9%.
"Although there appears to be no reason for the acceleration in payrolls, the broad based nature of the report will give the growth bulls a lot to talk about," Steven Ricchiuto, chief economist at Mizuho Securities U.S., wrote in an e-mail.
Still, Michael Gapen, an economist at Barclays noted that while the labor market is apparently on "solid footing ... the strength in the February payroll numbers was offset by downward revisions to January." Indeed, that metric was revised lower by 38,000.
There have been questions recently about whether the Fed will begin tapering off quantitative easing if the economy starts picking up steam. However, recent statements by Chairman Ben Bernanke and Vice Chairman Janet Yellen have suggested that the central bank sees the economy as still fragile enough to require aggressive easing.
"Although the headline nonfarm payrolls exceeded the market consensus forecast substantially in February, we think the combination of the unstable monthly path of job growth and a decline in the unemployment rate for the 'wrong reasons' are unsatisfactory to the Fed," Aichi Amemiya, an economist at Nomura wrote to clients.
Also on the economic front, a report from the Commerce Department showed wholesale inventories jumping 1.2% in January from the month before, a much bigger jump than the 0.3% expected. Barclays boosted its forecast of first-quarter economic expansion 0.3-percentage point to 1.9% on the news.
Sentiment also got another boost after the closing bell on Thursday when the Federal Reserve published the results of its stress tests on the largest U.S. banks. Out of 18 banks whose financials were put through a hypothetical financial and economic crisis, only one, Ally Financial, fared poorly. Among the banks that received passing marks were the nation's four biggest: J.P. Morgan Chase (JPM), Bank of America (BAC), Citigroup (C) and Wells Fargo (WFC).
"Markets are reacting to positive news from America last night, as US banks displayed their resilience in the latest stress tests," Brenda Kelly, a market analyst at IG Index in London wrote in an e-mail. Kelly also pointed to strong data out of China as an impetus for the gains seen in global markets.
The world's No. 2 economy saw its exports climb at a year-to-year pace of 21.8% in February, just slightly under the 25% growth the year before. Economists expected a much lower reading of 8.1% annual expansion.
In commodities, oil prices edged lower amid a stronger dollar. The benchmark U.S. contract fell 45 cents, or 0.49%, to $91.14 a barrel. Wholesale New York Harbor gasoline jumped 0.77% to $3.146 a gallon. Gold was essentially unchanged at $1,575 a troy ounce.
The Euro Stoxx 50 jumped 0.94% to 2716, the English FTSE 100 gained 0.27% to 6457 and the German DAX rose 0.57% to 7985.
In Asia, the Japanese Nikkei 225 surged 2.6% to 12284 and the Chinese Hang Seng rallied 1.4% to 23092.