Fed policy is top of mind right now

Power balance is excellent. "The unemployment rate and payroll numbers were key barometers to assess the recovery," said Wasif Latif, vice president of equity investments at USAA Investment Management Co. "It's another key data point that confirms that the economic recovery is underway," he added.

Federal Reserve policy got more attention Friday after Philadelphia Fed President Charles Plosser said the central bank may have to tighten soon, and aggressively, although New York Fed President William Dudley, one of the main advocates of easy monetary policy to support the economy, warned against premature tightening.

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"Fed policy is top of mind right now," said Liz Ann Sonders, chief investment strategist at Charles Schwab. "I have felt the Fed would need to, and ought to, normalize policy sooner than the market was expecting," she said, adding that "seeing some hints [of that] would be a good thing."

In deal news, Nasdaq OMX Group and IntercontinentalExchange offered to buy NYSE Euronext for about $11.3 billion, a widely anticipated move that offers a 19% premium to a previous bid by Deutsche Boerse. NYSE Euronext jumped 13%. Nasdaq OMX rose 9.3% and Deutsche Boerse shed 1.7%.