US STOCKS-Wall Street climbs after upbeat payrolls report

Reuters

* Payroll data tops expectations

* J.C. Penney gets letter of inquiry from SEC

* Sears Holdings to spin off Lands' End business

* Indexes up: Dow 0.84 pct, S&P 0.86 pct, Nasdaq 0.60 pct

By Chuck Mikolajczak

NEW YORK, Dec 6 (Reuters) - U.S. stocks climbed on Friday,putting the S&P 500 on track to halt a five-session losingstreak, in the wake of a stronger-than-expected payrolls report.

Nonfarm payrolls increased by 203,000 new jobs last monthand the jobless rate fell to a five-year low of 7.0 percent.Economists polled by Reuters had forecast payrolls rising180,000 last month and the unemployment rate falling to 7.2percent from 7.3 percent.

After an eight-week run that saw the S&P 500 climb nearlyseven percent, the benchmark index had dropped 1.2 percent overthe past five sessions, its longest losing streak since lateSeptember, as encouraging economic data increased expectationsthe Fed may soon trim its $85 billion in monthly bond purchases.

Many market participants have expected the Fed to announce acut in stimulus in March. The Fed has said it would slow itsmassive bond purchases when certain economic measures meet itstargets, including a decline in the U.S. unemployment rate. Thepayrolls report Friday may help gird expectations the economywould be able to support a Fed wind-down of stimulus.

"I don't think the Fed is in a big rush to do anythingdrastic in the absence of inflation. A few strong jobs numbersdo not mean we are out of the woods," said Michael Marrale, headof research, sales and trading at ITG in New York.

"That said, we are in a very good spot and we can offsetgrowth with tapering and we come out of this in one piece."

Other data showed consumer spending increased 0.3 percent inOctober after rising 0.2 percent in September. Economists polledby Reuters had expected consumer spending, which accounts forabout 70 percent of U.S. economic activity, to gain 0.2 percentin October.

The Thomson Reuters/University of Michigan's preliminaryreading on the overall index on consumer sentiment jumped to82.5 for December, up from a final reading of 75.1 in November.This was the highest reading for the index since July, andtopped analyst forecasts for a reading of 76.

The Dow Jones industrial average rose 133.09 points,or 0.84 percent, to 15,954.6, the S&P 500 gained 15.35points, or 0.86 percent, to 1,800.38 and the Nasdaq Composite added 24.247 points, or 0.6 percent, to 4,057.412.

J.C. Penney Co Inc fell 4.4 percent to $8.46 afterthe department store chain said it received a letter of inquiryfrom the U.S. Securities and Exchange Commission, seeking anexplanation on the company's financial position.

Struggling retailer Sears Holdings Corp, led byhedge fund manager Edward Lampert, rose 1.8 percent to $50.89after the company said it would spin off its Lands' End clothingbusiness.

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