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US STOCKS-Wall St set to rise on Fed bets after weak jobs data

Rodrigo Campos
Tuesday, 22 Oct 2013 | 9:11 AM ET

* U.S. job growth lost momentum last month

* Fed likely to continue stimulus after Sept. payrolls report

* Netflix shares extend gains on strong earnings, more subscribers

* Futures up: Dow 48 pts, S&P 5 pts, Nasdaq 10 pts

NEW YORK, Oct 22 (Reuters) - U.S. stocks were set to open higher on Tuesday after weaker-than-expected job creation last month raised expectations that the Federal Reserve will continue to stimulate the economy at the current pace into 2014.

U.S. employers added far fewer workers than expected, suggesting a loss of momentum in the economy that supported the Fed's decision to maintain its $85 billion a month in bond purchases. The stimulus has helped the S&P 500 rally to record highs.

"Full bore quantitative easing will probably be with us through the first quarter and speculation for an increase may be no further than another weak payroll," said Joseph Trevisani, chief market strategist at WorldWideMarkets in Woodcliff Lake, New Jersey.

"Today's underperforming jobs number fully justifies September's cautious (Fed)," he said.

The Fed threw markets into a loop in mid-September by keeping its stimulus intact when most in the market expected the start of a withdrawal. The Fed wanted more evidence of solid economic recovery.

Employers added 148,000 last month, the Labor Department said, compared with expectations of 180,000. While the job count for August was revised higher and the unemployment rate ticked down to 7.2 percent from 7.3 percent, employment gains in July were the weakest since June 2012.

Netflix shares rose 9 percent in premarket trading a day after it said it had added 1.3 million U.S. streaming customers in September. Netflix's third quarter net income reached $32 million, up from $8 million a year earlier.

S&P 500 futures rose 5 point and were slightly above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures rose 48 points and Nasdaq 100 futures added 10 points.

U.S. stocks ended little changed on Monday as lackluster earnings reports from McDonald's and others fed concerns that equities were overpriced, but the S&P 500 ticked up to close at a record high.

Transocean shares rose 4.1 percent in premarket trading after S&P Dow Jones Indices announced the drilling services company will replace Dell on the S&P 500 index after the close of trading next Monday.

Shares of cloud software maker VMware Inc rose 9.5 percent before the open a day after it reported a higher-than-expected quarterly profit.

S&P 500 companies scheduled to report earnings include Amgen , Juniper Networks and Broadcom. Dow components Travelers and DuPont reported results earlier Tuesday.

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