| NEW YORK
NEW YORK U.S. stocks started a traditionally healthy month on strong footing on Friday after solid jobs figures, but the S&P 500 may need help to break to new multi-year highs.
The S&P hovered near 1,333, a significant level as it represents double the 12-year low hit in March 2009. It is close to the 1,344 representing the S&P's 2011 high, its highest since June 2008.
"There's a lot of congestion in terms of price action around these levels and I wouldn't expect the market to break to new highs in the next weeks," said Paul Zemsky, head of asset allocation at ING in New York.
Strong job growth and supportive comments on Fed policy from influential New York Fed Bank President William Dudley were supportive, but the market is looking to forthcoming earnings to kick the rally into a higher gear.
U.S. employment grew solidly for a second month in March and the jobless rate hit a two-year low of 8.8 percent.
"Once we get to earnings and get confirmation companies continue to show strength, I think we'll make new highs on the S&P. But a couple of weeks of consolidation seems like a good thing to happen," Zemsky said.
About 7.4 billion shares traded on the New York Stock Exchange, NYSE Amex and Nasdaq, below last year's estimated daily average of 8.47 billion. Composite volume was the weakest for any week so far this year.
Dudley said quantitative easing that totaled $600 billion in bond purchases was expected to run until June, countering several days of hawkish rhetoric from other Federal Reserve officials.
The payrolls number was "a clear breakout in the trend of job growth to the upside," said Zemsky. "I think this is the game changer in terms of giving more confidence the recovery is going to be durable and survive the end of QE2."
NYSE Euronext NYX.N shares rallied after Nasdaq OMX Group Inc (NDAQ.O) and IntercontinentalExchange Inc (ICE.N) unveiled a bid to buy the rival exchanges operator, topping an earlier offer from Deutsche Boerse AG (DB1Gn.DE).
NYSE's stock surged 12.6 percent to $39.60 while ICE shares lost 3.1 percent to $119.75 and Nasdaq OMX rose 9.3 percent to $28.23.
The Dow Jones industrial average .DJI hit 12,419.71 -- its highest intraday level going back to June 2008 -- before closing up 56.99 points, or 0.46 percent, at 12,376.72. The Standard & Poor's 500 .SPX rose 6.58 points, or 0.50 percent, to 1,332.41. The Nasdaq Composite .IXIC gained 8.53 points, or 0.31 percent, to 2,789.60.
For the week, the Dow gained 1.3 percent, the S&P added 1.4 percent and the Nasdaq rose 1.7 percent.
April is the best month for the Dow industrials going back to 1950, with an average gain of 2 percent, according to the Stock Trader's Almanac.
In another snapshot of the economy, the U.S. manufacturing sector grew at a marginally slower pace in March, according to the Institute for Supply Management. The Commerce Department said construction spending fell more than expected in February, dropping to its lowest level since October 1999.
Advancing stocks outnumbered declining ones on the NYSE by a ratio of more than 2 to 1, while on the Nasdaq, slightly more than five stocks rose for every four that fell.
(Reporting by Rodrigo Campos; Editing by Jan Paschal)