* US job creation in April tops expectations
* Weakness in commodities seen as warning
* Indexes up: Dow, S&P 1.2 pct, Nasdaq 1.1 pct (Updates to late morning; changes byline)
By Angela Moon
NEW YORK, May 6 (Reuters) - An unexpectedly strong U.S. payrolls report propelled stocks higher on Friday one day after a selloff, but investors were wary that the market's months-long rally may be near a peak.
All three major indexes rose more than 1 percent after U.S. non-farm payrolls increased by 244,000 in April, the most in 11 months and well above economists' expectations for an increase of 186,000.
"The risk has definitely increased for a correction. The decline in commodities this week was sort of the start of it," said James Dailey, a portfolio manager at TEAM Asset Strategy Fund in Harrisburg, Pennsylvania.
The Dow Jones industrial average was up 152.20 points, or 1.21 percent, at 12,736.37. The Standard & Poor's 500 Index was up 15.94 points, or 1.19 percent, at 1,351.04. The Nasdaq Composite Index was up 31.87 points, or 1.13 percent, at 2,846.59.
Dailey said the S&P 500's next technical level to the upside was 1,400, "but we won't go there until some sort of a correction."
The benchmark S&P 500 had fallen 2.1 percent this week before Friday's advance. On Thursday commodities led selloffs in several markets on concerns over deteriorating demand.
The iShares Silver Trust suffered outflows of more than $1 billion in the week ended Wednesday, its worst one-week outflow ever, plus heavy losses due to the slump in the price of silver.
U.S. crude oil futures, which had slumped on Thursday after a batch of soft economic data during the week, pared early losses and rose 1.8 percent to $101.57.
Dailey said that while the broader market could see a 5-10 percent correction, emerging markets and sectors leveraged to commodities could see up to a 20 percent decline.
Exxon Mobil Corp rose 1.4 percent to $83.81 and Chevron Corp gained 1.5 percent to $104.15. The PHLX Oil service sector index rose 2.5 percent.
Friday marks the one-year anniversary of the "flash crash" on Wall Street when the Dow lost nearly 700 points in minutes.
The CBOE volatility index ., dropped 8.8 percent to 16.60 after closing at its highest level on Thursday since March 28.
Gains were also seen in materials-related stocks, with the S&P materials index up 1.9 percent, led by a 3.3 percent rise in mining company Freeport-McMoRan Copper & Gold to $51.49. (Reporting by Angela Moon, Editing by Kenneth Barry)