* Payrolls top expectations, unemployment hits 5-yr low
* J.C. Penney, Barnes & Noble shares fall on SEC inquiries
* Dow up 1 pct, S&P 500 up 1 pct, Nasdaq up 0.8 pct
By Rodrigo Campos
NEW YORK, Dec 6 (Reuters) - U.S. stocks rose on Friday after a stronger-than-expected payrolls report gave traders confidence that the economy could be healthy enough to withstand a scaling back of the Federal Reserve's stimulus.
The jobs-driven rally gave the S&P 500 its best day in nearly a month. But the broad index was still on track to post its first negative week in nine after falling in the previous five sessions.
Nonfarm payrolls added 203,000 in November, exceeding the forecast, and the U.S. unemployment rate fell to a five-year low of 7.0 percent. The Labor Department's report raised the prospects that the Fed would begin to taper its stimulus program sooner rather than later.
Economic data for the fourth quarter so far has been mixed, with labor market and consumer spending indicators firming while the housing market and business spending have slowed.
"The economy is still not generating the levels of inflation the Fed would like to see, so that may give them a little space to maneuver," said Cam Albright, director of asset allocation at Wilmington Trust Investment Advisors, in Wilmington, Delaware.
"I don't think (the payrolls data) backs the Fed into the corner that they have to taper in December."
Many market participants have expected the Fed to announce a cut in stimulus in March. The Fed has said it would slow its massive bond purchases when certain economic measures meet its targets, including a drop in the U.S. unemployment rate.
The Dow Jones industrial average rose 153.27 points or 0.97 percent, to 15,974.78. The S&P 500 gained 17.16 points or 0.96 percent, to 1,802.19. The Nasdaq Composite added 32.40 points or 0.80 percent, to 4,065.57.
After an eight-week run that pushed the S&P 500 up nearly 7 percent, the benchmark index had dropped 1.2 percent over the past five sessions, its longest losing streak since late September.
Intel ranked among the S&P 500's top points gainers, with its shares up 2.8 percent at $24.94 after Citigroup raised its rating on the chipmaker's stock to "buy" from "neutral."
J.C. Penney shares fell 6 percent to $8.32 after the department store chain said it received a letter of inquiry from the U.S. Securities and Exchange Commission, seeking an explanation on the company's financial position.
Barnes & Noble also disclosed an SEC investigation, and its stock fell 5.4 percent to $15.50.
Other data showed personal spending rose 0.3 percent in October, slightly higher than expected. The Thomson Reuters/University of Michigan's preliminary reading on the overall index on consumer sentiment jumped to 82.5 for December from a final November reading of 75.1.