The US jobs data supported views that the U.S. economy would avoid another recession.
Markets have posted strong gains after central bank moves earlier this week cut funding costs for banks. Signs that euro zone policymakers are working hard to resolve a compromise deal ahead of a Dec. 9 summit, viewed as make-or-break for the 12-year old single currency bloc, also lent support.
World stocks on the MSCI all-country index were up 0.4 percent, off earlier levels. The index is up about 8.4 percent so far this week, which would be its biggest weekly gain since March 2009. Earlier in the day, it was on track to post its biggest gain since November 2008.
US stocks rose but were off their highs. The Dow Jones Industrial Average was up 34.55 points, or 0.29 percent, at 12,054.58. The Standard & Poor's 500 Index was up 5.78 points, or 0.46 percent, at 1,250.36. The Nasdaq Composite Index was up 12.20 points, or 0.46 percent, at 2,638.40.
In currency markets, the euro fell to session lows against the US dollar and trimmed gains against the yen and Swiss franc.
Investors were hesitant to go overly long the euro ahead of the weekend and key event risks next week. The euro fell as low as $1.34170, the day's trough on trading platform EBS.
Speculation that the European Central Bank may lend to weak euro zone countries through the International Monetary Fund initially helped the euro.
Much caution remains in markets overall. Traders cited speculation about a possible downgrade of Spain's credit rating.
US Treasury prices turned higher. Benchmark 10-year Treasury notes traded 7/32 higher in price to yield 2.06 percent, down from 2.10 percent late Thursday.
Three-month dollar LIBOR rose and overnight borrowing from the European Central Bank was at its highest since March.
Meanwhile, oil prices rose to above $101 a barrel Friday. By early afternoon in Europe, benchmark crude for January delivery was up from $101.02 to $101.22 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 16 cents to settle at $100.20 on Thursday.
In London, Brent crude was up $1.16 cents at $110.15 on the ICE Futures exchange.
Markets were also bolstered by a speech by German Chancellor Angela Merkel calling for tighter fiscal discipline in the European Union, which provided hope that the euro zone would be taking more significant steps to control its debt crisis and ensure the future of its common currency.
Crude has jumped from $75 during the last two months amid signs the US economy will likely avoid a recession. Investors will be closely watching the Labor Department's November unemployment report later Friday for evidence economic growth is strengthening, which could justify higher crude prices.
Traders are also concerned about rising tensions over possible sanction against Iran, OPEC's second-largest producer, because of its nuclear program. Some analysts, such as J.P. Morgan, say that Iran may pre-emptively cut oil exports if sanctions are imminent, a move that would send oil prices soaring.
"This would undoubtedly shock the oil market, and the initial market shock could be in the $20 to $30 per barrel range," J.P. Morgan said in a report. "The risks of such a disruption have materially increased."
In other Nymex trading, natural gas fell 3.4 cents at $3.614 per 1,000 cubic feet. Heating oil added 5.67 cents to $3.0262 a gallon and gasoline futures gained 6.61 cents to $2.6240 a gallon.
