NEW YORK (TheStreet) -- U.S. stocks were snapping back on Friday after strong jobs numbers for September proved that the initially weak nonfarm payrolls report in August was just an anomaly to a broader trend of steady recovery. A better-than-expected services sector number also fueled the upbeat sentiment.

The "good news is bad news" thesis was brushed aside on confidence that the Federal Reserve is unlikely to raise rates in the first quarter of 2015 given that inflation remains in check.   

The Dow Jones Industrial Average gained 0.68%. The S&P 500  increased 0.79%. The Nasdaq was ahead by 1%.

Watch the video below for a closer look at how U.S. markets are starting the trading day Friday:

The Bureau of Labor Statistics reported that the U.S. created a greater-than-expected 248,000 jobs in September, rising from an upwardly revised August jobs number of 180,000. The headline figure for July was upwardly revised to 243,000, bringing the combined employment gains in July and August to 69,000 more than previously reported.

The jobless rate in September dropped to its lowest since July 2008 at 5.9%, down from 6.1% in August. Economists surveyed by Reuters, on average, were expecting a September jobs gain of 215,000 and the jobless rate to hold at 6.1%.

In U.S. economic news, the ISM Non-manufacturing Index came in at 58.6 in September, better than the consensus 58.5 estimate, though it slowed from August.

In corporate news on FridayJPMorgan (JPM) said the personal data of about 76 million retail customers and 7 million business customers was compromised in a security breach that the bank first disclosed this summer. Shares eked out a gain of 0.78%, up from an early morning of sideways action.

Fannie Mae (FNMA) and Freddie Mac (FMCC)  investors are pursuing an appeal after a federal judge on Tuesday ruled against investors who are trying to collect billions of dollars in profits of government-chartered mortgage companies.

Mylan (MYL) tacked on 9.08% after the pharmaceutical company said it now expects third-quarter adjusted earnings in the range of $1.12 to $1.16 a share, an increase from the previously forecast 90 cents to 95 cents a share.

Salix Pharmaceuticals (SLXP) and Italy's Cosmo Pharmaceuticals said they have terminated their merger agreement, a deal that was structured as a so-called inversion, because of a "changed political environment." Salix jumped 5.9%. 

Separately, Bloomberg reported that Botox maker Allergan (AGN) is running out of options to fend off a takeover by Valeant Pharmaceuticals (VRX) . The option of defending itself by acquiring smaller drugmaker Salix or merge with similarly sized peer Actavis seemed to be slipping away as Salix reportedly is in talks to sell itself to Actavis. Allergan rose 2.18% in late morning trades and Valeant added 1.25%.

Charles Schwab (SCHW)  dropped the Pimco Total Return Fund from its 10 target date funds and collective trusts, a company spokeswoman told Reuters. The firm completed its review of the fund this week following the announcement last Friday that Bill Gross, Pimco's co-founder and manager of the fund, was leaving to join Janus Capital (JNS) .

Walt Disney (DIS)  extended Robert Iger's contract as chairman and CEO by two years through June 30, 2018. Disney shares gained 1.11%.

The SPDR Gold Trust (GLD) was off 1.16% and the United States Oil Fund (USO) was down 1.08% as the U.S. dollar popped and light sweet crude oil prices hovered around $89-a-barrel on ongoing supply glut concerns. December gold futures fell below $1,200 an ounce for the first time this year.

-- By Andrea Tse in New York

Follow @AndreaTTse