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Wall Street rises for 7th week, but ends off its highs

Traders work on the floor of the New York Stock Exchange December 5, 2014. REUTERS/Brendan McDermid (UNITED STATES - Tags: BUSINESS)

By Ryan Vlastelica

NEW YORK (Reuters) - The Dow and S&P 500 closed a seventh straight weekly advance on Friday as a better-than-expected jobs report indicated strong economic growth, but perhaps to the point where interest rates could rise sooner than previously anticipated.

Bank stocks and other sectors tied to the pace of growth led on the day, though continued weakness in crude oil weighed on energy shares. While major indexes ended off their highs of the session, both the Dow and S&P closed at records.

Payrolls rose by 321,000 in November, way above the 230,000 estimated, while the unemployment rate held steady at 5.8 percent, a six-year low.

The report blew past forecasts, but also raised expectations that a rate hike from the Federal Reserve may materialize sooner than previously thought.

Ronald Sanchez, chief investment officer of Fiduciary Trust Company International in New York, said the number was "unambiguously strong," though it "could mean some changes to policy recommendations with the Fed. June 2015 is back on the table for when rates could rise."

Financials (.SPSY) rose 1 percent as higher interest rates would prop up earnings in the sector. Bank of America (BAC.N) rose 2.7 percent to $17.68 while Goldman Sachs (GS.N) was up 1.8 percent to $195.45, boosting the Dow.

Utilities (.SPLRCU), a dividend play, fell 0.8 percent as Treasuries yields rose. Energy (.SPNY) fell 1.2 percent alongside a 1.7 percent drop in crude (CLc1) prices. Most sectors ended well off their highs of the session.

"The day’s market action has to be seen in the context of the recovery we’ve had year-to-date. Payrolls confirm the strength of the economy, but that strength is reflected in stock prices," said Sanchez, who helps oversee $16 billion in assets.

Separate data showed new orders for U.S. factory goods fell for a third straight month in October, pointing to a slowdown in manufacturing activity.

The Dow Jones industrial average (.DJI) rose 58.69 points, or 0.33 percent, to 17,958.79, the S&P 500 (.SPX) gained 3.45 points, or 0.17 percent, to 2,075.37 and the Nasdaq Composite (.IXIC) added 11.32 points, or 0.24 percent, to 4,780.76.

For the week, the Dow rose 0.7 percent and the S&P rose 0.4 percent. It was the seventh straight weekly gain, a streak not seen in a year for both. The Nasdaq fell 0.2 percent on the week.

American Eagle Outfitters (AEO.N) fell 13.8 percent to $11.91 after the teen apparel retailer forecast a current-quarter profit below analysts' estimates and reported its fifth straight drop in quarterly income.

About 5.81 billion shares traded on all U.S. platforms, according to BATS exchange data.

NYSE advancers outnumbered decliners 1,614 to 1,480, for a 1.09-to-1 ratio; on the Nasdaq, 1,809 issues rose and 927 fell, for a 1.95-to-1 ratio favoring advancers.

The S&P 500 posted 98 new 52-week highs and 10 new lows; the Nasdaq Composite recorded 168 new highs and 93 new lows.

(Editing by Nick Zieminski)