The US bourse is set to open higher as European leaders get ready to meet.

New York - US stocks rose modestly on Friday after an unexpectedly strong payrolls report in February, although gains were curbed by lingering tensions in Ukraine, with the S&P 500 at record highs.

US employers added 175,000 jobs to their payrolls last month, exceeding expectations for 149,000 jobs, after creating 129,000 new positions in January, Labor Department data showed.

The unemployment rate, however, edged up to 6.7 percent from a five-year low of 6.6 percent.

“It was incredible, the market loves it, we were definitely braced for something lower,” said Sean McCarthy, regional chief investment officer, Wells Fargo Private Bank, based in Scottsdale, Arizona.

“When the ADP (employment data) came out and considering what we had seen in prior weeks from the Empire State survey and the Philly Fed, we were braced for something lower, so seeing 175,000 is incredible.”

The Dow Jones industrial average rose 57.93 points or 0.35 percent, to 16,479.82, the S&P 500 gained 2.94 points or 0.16 percent, to 1,879.97 and the Nasdaq Composite dropped 8.29 points or 0.19 percent, to 4,343.835.

Both the S&P 500 and Dow are on pace for a second straight week of gains, while the Nasdaq its on track for its fifth straight weekly advance.

Traders remained cautious ahead of the weekend, with the S&P 500 at record highs and amid a simmering crisis in Ukraine.

Russian President Vladimir Putin rebuffed a warning from US President Barack Obama over Moscow's military intervention in Crimea, saying Russia could not ignore calls for help from Russian speakers in Ukraine.

“There was that initial euphoria and then it fades right away,” said Ken Polcari, director of the NYSE floor division at O'Neil Securities in New York.

“You are going into the weekend, you still have the Ukrainian thing - Putin is not necessarily just bowing here so you still have that headline risk over the weekend.”

After initially piling into gold, crude and grains on Monday as tensions escalated over Crimea last weekend, investors have cautiously returned to stocks across the world.

A gauge of global equities traded near a six-year high while the S&P 500 closed Thursday at a record.

Shares of FireEye Inc dropped 6.8 percent to $83.50 after the network security company priced the follow-on public offering of 14 million shares of its common stock at $82 per share.

Safeway Inc, the second-largest US mainstream grocery store operator, said Thursday private equity firm Cerberus Capital Management would acquire the company in a deal valued at about $9.4 billion.

Safeway shares fell 2.8 percent to $38.35.

Skullcandy Inc jumped 39.4 percent to $10.36 after the headphone maker posted fourth-quarter earnings and provided an outlook for the first-quarter and full year.

Big Lots Inc surged 20 percent to $35.10 after the close-out retailer reported a better-than-expected adjusted profit for the holiday quarter. - Reuters