The S&P 500 Index closed at its highest level in five years on Friday, riding a post-New Year’s surge to hit 1,466 points.

That’s just a seven-point gain for the day, less than one per cent, but the index was up 4.6 per cent over last week’s  numbers — part of a rally that swept across U.S. markets after lawmakers reached an agreement to avoid the so-called "fiscal cliff."

The Dow Jones industrial average was up 3.8 per cent for the week while the Nasdaq jumped 4.8 per cent, posting its largest weekly percentage gains in more than a year again thanks to the mid-week rally.

The S&P/TSX composite index advanced 70 points to 12,541. The Canadian dollar closed up a tenth of a cent to 101.31 cents US.

Trading on Friday itself was relatively flat, however, as lingering uncertainty about the U.S. economy offset encouraging job reports from both sides of the border.

Earlier in the day, both Canada and the U.S. posted positive employment numbers — in December Canada saw its lowest jobless rate in four years while the States posted better-than-expected gains in light of last month’s anxiety over the fiscal cliff.

Investors remain jittery, however, over how long the U.S. Federal Reserve will stick with its economic stimulus plan, which involves keeping interest rates low by buying bonds.

The minutes of the latest Fed policy meeting released on Thursday showed that policymakers expressed broad support for the Fed's plan to buy bonds to support the U.S. economy. But there was a split over how long to continue the bond purchases.

Oil prices rose — up 17 cents to close at $93.09 US — after a report from the U.S. Energy Department revealed a much bigger drop in American crude supplies than predicted by analysts.

The report said crude supplies fell by 11.1 million barrels, or three per cent, last week. Analysts had expected a drop of just a million barrels.

With files from The Canadian Press