US STOCKS-S&P 500, Dow hit milestones after strong jobs report
* S&P 500 trades above 1,600, Dow briefly tops 15,000
* U.S. job market shows surprising strength
* Russell 2000 jumps, hits record
* Indexes up: Dow 1.1 pct, S&P 1.2 pct, Nasdaq 1.4 pct
NEW YORK, May 3 (Reuters) - U.S. stocks rallied on Friday, with the S&P 500 and Dow industrials hitting intraday records after employment grew more than expected in April, easing concerns about a weak economy.
The S&P 500 index broke above 1,600 and the Dow briefly traded above 15,000 for the first time as stocks extended this year's rally.
Confirming the broad strength of the market's advance, the mid- and small cap Russell 2000 stock index rose 2 percent to a record.
Non-farm payrolls rose by 165,000 last month and the unemployment rate fell to 7.5 percent, a four-year low, from 7.6 percent, the government said. In addition, hiring was much stronger than previously thought in February and March.
Investors welcomed the gains after weeks of disappointing data, including tepid manufacturing reports, that suggested the economic recovery was losing steam.
"The payrolls number gives the OK for the risk-on trade and this will be led by economically sensitive companies," said Dan Veru, chief investment officer at Palisade Capital Management in Fort Lee, New Jersey.
The Dow Jones industrial average rose 162.59 points or 1.1 percent, to 14,994.17, the S&P 500 gained 19.32 points or 1.21 percent, to 1,616.91 and the Nasdaq Composite added 46.22 points or 1.38 percent, to 3,386.84.
Basic materials and industrials led the S&P advance, with the S&P materials index up 2 percent.
Palisade's Veru said the current earnings season has been characterized by sluggish growth in revenues, so as organic growth by companies becomes harder, large-cap firms "will choose to buy growth."
"We would anticipate medium and small companies will see robust merger and acquisition activity as a result of that," Veru said.
Of the 404 companies in the S&P 500 that have reported earnings so far, 68.3 percent have beaten earnings expectations, but only 46.3 percent have reported revenue above expectations.
Over the past four quarters, 67 percent of companies beat on earnings and 52 percent beat revenue estimates.
The S&P and Dow were on track to end the week with a gain shy of 2 percent, while the Nasdaq added 3.3 percent so far this week.
Mining stocks were among top gainers, including Freeport McMoRan Copper & Gold Inc, up 3.4 percent at $31.36, after prices of copper posted the biggest daily gain since late October 2011.
General Electric, up 1.6 percent at $22.68, led gains among industrials after it won approval to buy oilfield pump maker Lufkin Industries for about $3 billion. The deal will allow GE to sharply increase its presence in the market to extract oil and natural gas from shale.
Gilead Sciences shares hit their highest price ever and were last up 6.3 percent to $55.45 a day after the world's largest maker of branded HIV drugs reported a big rise in quarterly profit.
LinkedIn Corp shares fell 10 percent to $181.49 a day after the social network reported disappointing revenue forecasts.
In other economic reports on Friday, U.S. factory orders fell sharply in March while the pace of growth in the vast U.S. services sector eased in April to the slowest pace in nine months.
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