An unexpectedly strong report on U.S. payrolls propelled stocks higher on Friday one day after a sell-off, but investors were wary that the market's months-long rally may be near a peak.

Commodity-related stocks, which have been weighing the market for most of the week, rebounded as oil prices recovered. Industrials stocks on the S&P index <.GSPI> were up 1.4 percent, the biggest gainers on the index. Energy stocks <.GSPE> were up 1 percent.

All three major indexes rose more than 1 percent after U.S. non-farm payrolls increased by 244,000 in April, the most in 11 months and well above economists' expectations for an increase of 186,000.

This is the market typically responding to good news but I would say the market is on the edge now, a bit wary of the market rally, said Steve Claussen, chief investment strategist at online brokerage

But the trading volume in the options market was solid without significant action in puts, suggesting investors were not pulling out the market, Claussen said.

The Dow Jones industrial average <.DJI> was up 114.93 points, or 0.91 percent, at 12,699.10. The Standard & Poor's 500 Index <.SPX> was up 11.82 points, or 0.89 percent, at 1,346.92. The Nasdaq Composite Index <.IXIC> was up 32.36 points, or 1.15 percent, at 2,847.08.

James Dailey, a portfolio manager at TEAM Asset Strategy Fund in Harrisburg, Pennsylvania, said the S&P 500's next technical level to the upside was 1,400, but we won't go there until some sort of a correction.

The benchmark S&P 500 had fallen 2.1 percent this week before Friday's advance. On Thursday commodities led selloffs in several markets on concerns over deteriorating demand.

The iShares Silver Trust suffered outflows of more than $1 billion in the week ended Wednesday, its worst one-week outflow ever, plus heavy losses due to the slump in the price of silver.

U.S. crude oil futures, which had slumped on Thursday after a batch of soft economic data during the week, pared early losses, but were down 0.4 percent at $99.45 a barrel.

Dailey said that while the broader market could see a 5-10 percent correction, emerging markets and sectors leveraged to commodities could see a decline of up to 20 percent.

Exxon Mobil Corp rose 0.3 percent to $82.85 and Chevron Corp gained 0.5 percent to $103.05. The PHLX Oil service sector index <.OSX> rose 0.4 percent.

Friday marks the one-year anniversary of the flash crash on Wall Street when the Dow lost nearly 700 points in minutes.

The CBOE volatility index ., dropped 0.4 percent to 18.12 after closing at its highest level on Thursday since March 28.

Gains were also seen in materials-related stocks, with the S&P materials index <.GSPM> up 1.1 percent, led by a 0.9 percent rise in mining company Freeport-McMoRan Copper & Gold to $50.30.

(Reporting by Angela Moon, Editing by Chizu Nomiyama)