Stocks climbed to five-year highs on Friday in the wake of jobs and manufacturing data that showed the economy's sluggish recovery is still on track.
The Dow industrials rose to 14,000 for the first time since mid-October 2007 and the S&P hit its highest since December that year. The S&P advanced 5 percent in January, its best start to a year since 1997.
Analysts attributed the market's robust showing so far this year partly to a deluge of cash flowing into equities.
Data on Thursday showed investors poured $12.7 billion into U.S.-based stock mutual funds and exchange-traded funds in the latest week, concluding the strongest four-week flows into stock funds since 1996.
"There's a lot of money looking for a home and people are finally deciding the bond market is done and moving money into equities," said Edward Simmons, managing director and partner at HighTower in Portland, Maine.
"I see the rotation (of assets) pushing the market up in the face of not-massive amounts of good news," he said. "People are overlooking the higher risk in equities."
Employment grew modestly in January, with 157,000 jobs added in the month, slightly below expectations for 160,000. Still, figures for both November and December were revised upwards.
Other reports released Friday showed the pace of growth in the U.S. manufacturing sector picked up in January to its highest level in nine months, U.S. consumer sentiment rose more than expected last month, while December construction spending also beat forecasts.
"All the data seems to keep pointing to a slowly, steadily improving economy," said Eric Kuby, chief investment officer at North Star Investment Management Corp in Chicago.
The Dow Jones industrial average .DJI rose 137.21 points or 0.99 percent, to 13,997.79, the S&P 500 .SPX gained 14.81 points or 0.99 percent, to 1,512.92 and the Nasdaq Composite .IXIC added 34.76 points, or 1.11 percent, to 3,176.89.
With the day's gains, major equity indexes were on track for a fifth straight week of gains. The S&P 500 is also coming off its best monthly performance since October 2011.
Investors were also attuned to corporate earnings, with a trio of Dow components reporting profits that beat expectations.
Exxon Mobil (XOM.N) was little changed at $89.95 after its results while Chevron (CVX.N) added 0.8 percent to $116.10.
Drugmaker Merck & Co (MRK.N) fell 2.9 percent to $42 after a cautious 2013 outlook.
Generic drugmaker Perrigo (PRGO.O) reported a better-than-expected second-quarter profit and its shares jumped 6.3 percent to $106.92, the largest advancer on the S&P 500.
Of the 252 companies in the S&P 500 that have reported earnings so far, 69 percent have exceeded expectations, according to Thomson Reuters data. That is a higher proportion than over the past four quarters and above average since 1994.
Overall, S&P 500 fourth-quarter earnings are estimated to have grown 4.4 percent, according to the data, up from a 1.9 percent forecast at the start of the earnings season but well below a 9.9 percent profit growth forecast on October 1.
Dell Inc (DELL.O) gained 4.2 percent to $13.80 after sources said the company was nearing an agreement to sell itself to a buyout consortium led by its founder Michael Dell and private equity firm Silver Lake Partners.
Shares of General Motors (GM.N) and Ford Motor (F.N) rose after the two largest American automakers posted better-than-expected U.S. auto sales for January.
GM gained 1.2 percent to $28.42 and Ford added 0.9 percent to $13.07.
Shares of Zoetis (ZTS.N) surged on its trading debut on the New York Stock Exchange after its shares were priced at $26, above the expected range. Zoetis was trading at $30.67 at midday, after earlier climbing as high as $31.74.