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NEW YORK (Reuters) - Stocks on Wall Street rallied on Friday after strong jobs data made it almost certain the Federal Reserve would raise interest rates in two weeks, while a surprise move by major oil exporters to keep pumping near-record output pushed crude prices down.
The dollar rose, gold climbed about 2 percent and base metals, including copper, gained after the U.S. jobs report for November paved the way for the Fed to raise rates for the first time in nearly a decade at a two-day meeting that ends Dec. 16.
The U.S. economy created 211,000 jobs in November, the U.S. Labor Department said. September and October data was revised to show 35,000 more jobs than previously reported.
"The numbers did not disappoint. We cleared the last hurdle for a rate increase," said Chris Gaffney, president of EverBank World Markets in St. Louis.
U.S. stocks jumped more than 2 percent, with the Dow industrials and the S&P 500 posting their biggest gains in three months. All 10 major S&P 500 sectors climbed except the energy index .SPNY, which fell after the Organization of the Petroleum Exporting Countries failed to cap near-record output.
Stocks rallied in a sign investors are taking their cue from economic performance instead of central bank monetary policy.
"We're going to see the market focused on what the U.S. economy is doing, rather than Fed policy," said Brad McMillan, chief investment officer at Commonwealth Financial Network in Waltham, Massachusetts.
MSCI's all-country world stock index .MIWD00000PUS gained 0.8 percent.
The Dow Jones industrial average .DJI closed up 369.96 points, or 2.12 percent, to 17,847.63. The S&P 500 .SPX gained 42.07 points, or 2.05 percent, to 2,091.69 and the Nasdaq Composite .IXIC added 104.74 points, or 2.08 percent, to 5,142.27.
Less-than-expected tweaks to the European Central Bank's stimulus package on Thursday sent markets into a tailspin but will make it easier for the Fed to raise rates, said Omar Aguilar, chief investment officer of equities at Charles Schwab Investment Management.
The euro, which gained 3 percent on Thursday, will ease the impact of a strong dollar on U.S. corporate earnings, and should help bolster equity markets, he said.
"I can see from now until the end of the year moderate gains, growing into a nice steady pace," Aguilar said.
European shares ended lower, with oil stocks .SXEP falling almost 2 percent on the news from the OPEC meeting in Vienna.
The pan-European FTSEurofirst 300 index .FTEU3 fell 0.34 percent to its lowest level in almost three weeks.
Brent crude oil futures LCOc1 settled down 84 cents to $43.00 a barrel. U.S. crude futures CLc1 dropped $1.11 to settle at $39.97 a barrel, just below the key price level of $40 that has been a major battleground for traders.
Spot gold XAU= rose as much as 2.5 percent to its highest in almost three weeks at $1,088.70 an ounce, and was trading at $1,086.15.
The dollar JPY= was last up 0.57 percent at 123.16 yen, while the euro EUR= slid 0.62 percent against the dollar to $1.0870. The dollar index .DXY, which measures the greenback against a basket of six major rivals, was last up 0.73 percent at 98.337 .DXY.
The gap between 10-year U.S. and German bond yields narrowed to its tightest in more than a month on Friday as investors bet that a divergence in monetary policy between the Fed and the ECB may be less stark than previously thought.
The euro on Thursday made its biggest one-day move in more than six years in a dramatic reversal of its recent rally after ECB President Mario Draghi surprised investors with less monetary stimulus than markets expected.
Benchmark 10-year Treasury notes US10YT=RR were last up 15/32 in price to yield 2.2746 percent.
Yields on German 10-year yields climbed 6 basis points on Friday, rising above 0.70 percent for the first time in 2-1/2-months DE10YT=TWEB.
Additional reporting by Jamie McGeever; Editing by Nick Zieminski, Bernadette Baum and Dan Grebler