EMERGING MARKETS-Latam stocks hit 3-month high on US jobs data

* U.S. payroll data spurs optimism about recovery

* Industrial output in Brazil higher than expected

* Brazil Bovespa up 0.99 pct, Mexico IPC up 0.89 pct (Updates to close)

By Michael O'Boyle and Lorena Segura

MEXICO CITY, April 1 (Reuters) - Latin American stocks rose to their highest level since the start of the year on Friday, but a rally may be tapped out as investors await further signs that global growth will back up strong gains.

The MSCI Latin American stocks index <.MILA00000PUS> rose 1.25 percent, extending this week's rally to 4 percent after a more than 3 percent gain in the prior week.

The region's stock indexes broke through key technical barriers this week, fanning hopes that equities could begin the second quarter strong after a disappointing start to the year.

U.S. employment notched a second straight month of solid gains, underscoring a decisive shift in the labor market that should help bolster consumer demand in the United States, a key trading partner for Latin America.

But the lack of important data next week to back up the optimism could leave stocks open to some profit-taking.

"We have seen two weeks of very good gains," said Jaime Aguilera, a stock strategist at HSBC in Mexico City. "Next week has little data, and I think we could see markets move sideways with some profit-taking."

Brazil's benchmark Bovespa stock index <.BVSP> rose 0.99 percent to close at its strongest in more than two months. The Bovespa broke through a resistance level at 68,000 on Thursday and its short-term resistance level is now at 70,000, said Rossano Oltramari, an analyst with the brokerage XP Investimentos.

Brazilian stocks were given a boost this week by signs that the central bank may be drawing an interest rate hike cycle to a close.

Investors shifted investments from emerging markets to developed economies this year as recoveries in those nations gained steam while growth in economies like Brazil and Chile were seen slowing due to higher interest rates.

But in the second quarter, Latin American markets may see fresh funds heading their way, as some see a rapid rise in U.S. stocks as having gone too far, too fast.

"There is still a lot of cash on the sidelines, and U.S. markets have already had a good rally, so you could see some people putting money back into emerging markets," said Rogelio Gallegos, who helps manage $750 million in equity investments at Actinver in Mexico City.

Financial stocks led the Bovespa's gain. Exchange operator BM&FBovespa rose 3.71 percent, credit card operator Cielo gained 3.32 percent.

Mexico's IPC stock index <.MXX> rose 0.89 percent to a two-month high. The United States is Mexico's top trading partner and U.S. data has a big influence south of the border.

The index has broken out of a descending channel on its chart, suggesting the IPC may be stabilizing after a steady downtrend since January that has cost the gauge nearly 3 percent during the first quarter.

America Movil was the index's biggest weighted gainer. Shares in Latin America's largest cell phone provider jumped 0.9 percent.

Mexican conglomerate Alfa gained 3.41 percent after it said late Thursday it would open a car parts plant in India later this year.

Chile's IPSA index <.IPSA> rose 1.91 percent, also a two-month high as retailer Cencosud rose 2.9 percent. (Additional reporting by Silvio Cascione; Editing by Dan Grebler)