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NEW YORK – Good news was finally good news for the stock market on Friday.

Stocks rose sharply after the government reported a fourth straight month of solid U.S. job gains, the latest encouraging sign for the economy.

The strengthening job market focused investors on the nation’s improving economy instead of concerns about the Federal Reserve’s stimulus, snapping a five-day losing streak for stocks.

Stocks had been falling this week after a string of positive economic reports made investors worry that the Fed would soon pull back on its $85 billion in monthly bond purchases, which have kept long-term interest rates low and supported the stock market.

Now that hiring is showing consistent strength, investors seem to be letting go of their worry that the economy isn’t ready for the Fed to start weaning the U.S. off that stimulus.

Employers added 203,000 jobs last month after adding 200,000 in October, the Labor Department announced before the U.S. stock market opened on Friday. November’s job gain helped lower the unemployment rate to 7 percent from 7.3 percent in October.

The Dow closed up 198.69 points, or 1.3 percent, to 16,020.20. The Standard & Poor’s 500 index rose 20.06 points, or 1.1 percent, to 1,805.09, its biggest gain in a month. The Nasdaq composite climbed 29.36, or 0.7 percent, to 4,062.52.

“Now we’re getting investors trading more on fundamentals and long-term earnings for next year,” said Mike Serio, regional Chief Investment Officer for Wells Fargo Private Bank. “There may be some backbone to the economy.”

Corporations have kept growing their earnings and the Fed’s stimulus has kept bond yields low, making stocks a more attractive investment relative to bonds. Fed policy makers have stressed that a gradual reduction in stimulus won’t necessarily lead directly to higher short-term lending rates.

“The Fed has been trying for several months now to get the market to realize that tapering and tightening aren’t the same thing,” said said Randy Frederick, a director of trading and derivatives at Charles Schwab. “The market is finally realizing that.”

In U.S. government bond trading, the yield on the 10-year Treasury note fell to 2.86 percent, from 2.87 percent Thursday.

The bond market’s muted reaction to the strong jobs report may have been because the Fed was buying debt securities, said Jack Ablin, chief investment officer at BMO Private Bank. The central bank was scheduled to buy between $4.25 billion and $5.25 billion of Treasury notes on Friday, according to its monthly purchasing schedule, Ablin said. Opinion among analysts is still divided as to when the Fed will start to cut back its purchases. Most believe that policymakers will want to see a longer trend of improving economic data before they start winding down. That makes a move at their next meeting, Dec. 17-18, unlikely.

The Fed’s first two meetings next year are in January and March.