NEW YORK (CNN/Money) - Stocks were poised for large gains Friday after the government's jobs numbers for March came in far stronger than forecast by economists. Meanwhile bond prices plunged.

S&P and Nasdaq futures were both climbed just after the 8:30 a.m. ET employment report that showed a net gain of 308,000 jobs in March. But the unemployment rate edged up to 5.7 percent from 5.6 percent. Economists, on average, had forecast unemployment held steady in March at 5.6 percent and that payrolls growing by about 123,000 jobs, according to Briefing.com.

Even that forecast had been seen as soft as the job growth numbers had come in below forecasts for 10 of the last 14 months. The report raised hopes the jobless part of the so-called jobless recovery could be coming to a close.

Stocks rose modestly Thursday, starting the second quarter with tech-fueled gains after ending mixed in the first quarter. (For more on Thursday's markets, click on the chart.)

Overseas, stocks rose in Japan and started flat in Europe.

Treasury bond prices plunged on the news, as the strong jobs reported suggested the Federal Reserve could start to move towards raising interest rates at last. The 10-year note was off more than two full points as the yield, which moves in the opposite direct, rose to 4.13 percent from 3.88 percent before the report.

The dollar was modestly higher against the euro and the Japanese yen.

But others point to growing signs that the labor market is getting ready to turn around. For more on the debate, and the outlook for the job market, click here.

Stocks to watch Friday include Gateway (GTW: Research, Estimates), which said it was closing 188 stores and cutting 2,500 jobs in the latest restructuring move since it bought eMachines Inc. last month.

Also, XM Satellite Radio (XMSR: Research, Estimates) jumped in after-hours trading after saying it added 320,000 subscribers in the first-quarter of 2004, bringing its total subscriber roll to nearly 1.7 million.

YOUR E-MAIL ALERTS XM Satellite Radio Holdings Incorporated Department of Labor (DOL) Unemployment Japan or Create your own Manage alerts | What is this?

For more stocks that could be active Friday, click here.  

--from staff and wire reports