NEW YORK (CNNMoney.com) - The Dow Jones industrial average surged to its highest level in six years Friday, just about 145 points shy of the measure's record, after a weaker-than-expected April jobs report fanned hopes that the Federal Reserve's interest-rate hiking campaign can soon end.

The Dow Jones industrial average (up 138.88 to 11,577.74, Charts) jumped 1.2 percent. That set it at its highest close since Jan. 14, 2000, when it ended at 11,722.98, an all-time high.

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The broader Standard & Poor's 500 (up 13.51 to 1,325.76, Charts) index climbed 1 percent and ended at its highest point since Feb. 15, 2001. The Nasdaq composite (up 18.67 to 2,342.57, Charts) added 0.8 percent.

The bond market had a similarly positive response to the job report. Treasury prices rallied, lowering the yield on the benchmark 10-year note to 5.10 percent from 5.15 percent late Thursday, near a four-year high.

"Today, the market is reacting to the employment report and bets that the Fed will pause soon," said Paul Rabbit, president at Rabbit Capital Partners.

However, he said he is concerned this Friday's rally could represent something of a "last gasp" for the aging bull market.

"I think the market is running on vapor," Rabbit said. "There are so many negatives out there, yet there is this excessive optimism that keeps lifting stocks."

Some market watchers would argue that Friday's moderate volume would also suggest the rally is not as enthusiastic as it would seem.

All three major gauges rose for the week. The Dow gained nearly 1.9 percent for the week, the S&P added around 1.2 percent and the Nasdaq was up nearly 0.9 percent.

The stock market will take its cue next week from the outcome of Wednesday's Federal Reserve policy-setting meeting.

Ahead of the meeting, investors will look to earnings from Cisco Systems (down $0.11 to $21.75, Research), due out after the close Tuesday.

After the close Friday, it was reported that Berkshire Hathaway is buying an 80 percent stake in privately owned tool maker Iscar Metalworking for $5 billion. The news ended speculation that the company run by Warren Buffett would announce other big purchases at its shareholder meeting this weekend.

Employers added a smaller-than-expected 138,000 jobs to their payrolls in April, versus Wall Street economists' forecasts for 200,000. In addition, the March number was revised down to 200,000 from an original reading of 211,000.

The unemployment rate, generated by a separate survey, held steady at 4.7 percent in the month.

The slowdown in the labor market was received positively by the stock market, with investors betting that it means that the Federal Reserve can pause in its rate-hiking campaign following next week's policy meeting.

The central bank is widely expected to boost the Fed funds rate, a key overnight lending rate, by a quarter-percentage point to 5 percent at its meeting next week. That would mark the 16th consecutive rate hike since the central bank began its rate-hiking campaign in June 2004.

However, Fed Chair Ben Bernanke has hinted that the Fed may pause soon, and futures contracts on the Chicago Board of Trade suggest traders think the Fed will stop as soon as June.

"What the report does is give the Fed some breathing room," said Stephen Stanley, chief economist at RBS Greenwich Capital. "People were beginning to worry that they would pause at the June meeting and that the economy would keep going strong, which would be bad for stocks."

He said the April payrolls report is making investors happy in that it is giving the impression that the Fed's forecast is correct - namely, that the economy is slowing down, therefore necessitating a pause.

However, Stanley cautioned that the payrolls number is notoriously volatile, that the labor market is stronger than the report would suggest, and that he doesn't think the economy is cooling as much as the Fed has suggested, despite the impact of the slowdown in housing. He says the risk that the Fed will pause, but then resume its rate hikes hasn't moderated despite Friday's report.

Stock gains were broad based, with 28 out of 30 Dow issues rising.

Component Walt Disney (up $0.69 to $29.09, Research) climbed 2.4 percent and was the New York Stock Exchange's most-actively traded issue. The media company jumped after shareholders of Pixar Animation Studios voted to approve the company's purchase by Disney in a deal worth $7.4 billion in stock.

Pixar (up $2.41 to $67.69, Research) shares gained too.

Other Dow gainers included Alcoa (up $0.62 to $35.10, Research), Boeing (up $1.83 to $88.47, Research), General Motors (up $0.60 to $23.18, Research) and Home Depot (up $1.03 to $41.29, Research).

Microsoft (up $0.36 to $23.80, Research) and the Dow's other tech components gained too.

Dow financial companies also shot higher, including JP Morgan Chase (up $0.96 to $46.65, Research) and Citigroup (up $0.99 to $50.37, Research).

The Amex Securities Broker/Dealer (up 7.32 to 235.41, Charts) index surged 3.2 percent.

Biotech snapped back after sliding earlier in the week. The Amex Biotechnology (Charts) index added 3.2 percent.

Oil stocks also jumped back after the previous day's selloff, boosting the Philadelphia Oil Service (up 3.96 to 232.90, Charts) sector index by 1.7 percent.

Oil stocks also got some help from El Paso and EOG Resources, which both reported sharply higher earnings that beat estimates. Shares of El Paso (up $1.69 to $15.18, Research) jumped 12.5 percent and EOG (up $4.86 to $76.31, Research) gained almost 7 percent.

Activision (up $1.67 to $14.76, Research) shares jumped almost 13 percent in unusually active Nasdaq trade after the video game software publisher reported a narrower-than-expected quarterly loss and sales that beat forecasts.

Market breadth was positive. On the New York Stock Exchange, winners beat losers nearly three to one on volume of 1.68 billion shares. On the Nasdaq, advancers topped decliners by more than three to two on volume of almost 1.99 billion shares.

Crude oil for June delivery settled up 25 cents at $70.19 a barrel on the New York Mercantile Exchange. Oil tumbled more than 6 percent in the last two sessions in response to a government report showing a surprise rise in oil and gas supplies.

COMEX gold for June delivery gained $7.80 to settle at $684.30 an ounce.

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