* Data show U.S. job growth lost momentum last month
* Fed seen unlikely to taper stimulative policy this year
* Indexes up: Dow 0.7 pct, S&P 0.7 pct, Nasdaq 0.6 pct
By Rodrigo Campos
NEW YORK, Oct (KOSDAQ: 039200.KQ - news) 22 (Reuters) - U.S. stocks climbed on Tuesday,with the S&P 500 at a record intraday high, afterweaker-than-expected job creation last month strengthenedexpectations the Federal Reserve will stimulate the economy intonext year.
Many economists think the Fed will hold off on scaling backits easy money policy, which has kept borrowing costs low, untilnext year. Federal Reserve policy to stimulate the economy hasbeen a key factor in stocks' rally.
"This is the extension of a momentum rally that started inSeptember when the Fed said 'no taper;'liquidity is underpinningthe market," said Quincy Krosby, market strategist at Prudential (LSE: PRU.L - news)Financial in Newark, New jersey.
She said seasonality may begin to play a part in the rally'sextension, as the market traditionally rallies at the year-end,and specific earnings are also giving investors hope.
"Earnings from some companies, including key industrials,are suggesting demand is slowly but surely beginning to pick up;it's turning a corner," she said.
Netflix shares led percentage gainers on the Nasdaq100 a day after it said it had added 1.3 million U.S.streaming customers in September. Netflix's third quarter netincome reached $32 million, up from $8 million a year earlier.Shares gained 6.7 percent to $378.72 after hitting a record$389.16.
U.S. employers added 148,000 workers last month, well belowthe 180,000 economists had expected, suggesting a loss ofmomentum in the economy. The data was seen as supporting theFed's decision to maintain its $85 billion a month in bondpurchases.
"The September numbers vindicate the Fed's decision topostpone tapering, said Brian Jacobsen, chief portfolio managerat Wells Fargo Funds Management in Menomonee Falls, Wisconsin.
"If people are expecting a Fed taper in December, they maynot find that under the Christmas tree. Instead, it might beJanuary or March," he said.
The Fed threw markets into a loop in mid-September bykeeping its stimulus intact when most expected the start of awind-down. The Fed wanted more evidence of solid economicrecovery.
The new job count for August was revised higher and theSeptember unemployment rate ticked down to 7.2 percent from 7.3percent, but employment gains in July were the weakest sinceJune 2012.
The Dow Jones industrial average rose 105.34 pointsor 0.68 percent, to 15,497.54, the S&P 500 gained 12.69points or 0.73 percent, to 1,757.35 and the Nasdaq Composite added 21.44 points or 0.55 percent, to 3,941.489.
The S&P hit a record intraday high at 1,759.33.
Transocean (NYSE: RIG - news) shares rose 4.8 percent to $48.80 afterS&P Dow Jones Indices announced the drilling services companywill replace Dell (NasdaqGS: DELL - news) on the S&P 500 index after the closeof trading next Monday.
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