* October payrolls well above expectations
* Santarus jumps on buyout deal
* Disney falls after earnings
* Indexes up: Dow 0.10 pct, S&P 0.21 pct, Nasdaq 0.51 pct
NEW YORK, Nov 8 (Reuters) - U.S. stocks rose on Friday, shaking off the initial selloff in futures after an unexpectedly strong payrolls report increased chances the Federal Reserve could begin to scale back its stimulus before the end of the year.
Employers added 204,000 new jobs last month, the Labor Department said on Friday. The unemployment rate, however, rose to 7.3 percent from September's nearly five-year low of 7.2 percent. Expectations called for payrolls rising 125,000 in October.
The stronger than expected data, coupled with Thursday's better-than-expected GDP growth, raised expectations the Federal Reserve will begin to trim its bond-buying program of $85 billion a month earlier than anticipated.
"This is a shockingly impressive number," said Cameron Hinds, Regional CIO for Wells Fargo Private Bank in Omaha, Nebraska.
"Eventually we truly need to have good news and the market take it as good news to propel the market substantially higher."
The benchmark S&P index is up 22.7 percent for the year, with gains largely driven by the Fed's stimulus.
Other economic data showed consumer spending rose 0.2 percent after advancing 0.3 percent in August, in line with expectations.
But the Thomson Reuters/University of Michigan's preliminary reading on consumer sentiment fell to 72.0 in November, its lowest since December 2011 and below both October's final reading of 73.2 and the 74.5 forecast.
The Dow Jones industrial average rose 15.09 points or 0.1 percent, to 15,609.07, the S&P 500 gained 3.66 points or 0.21 percent, to 1,750.81 and the Nasdaq Composite added 19.595 points or 0.51 percent, to 3,876.927.
Santarus Inc surged 37.6 percent to $31.95 after Salix Pharmaceuticals Ltd agreed to buy the drugmaker for about $2.6 billion.
Walt Disney Co rose 0.7 percent to $67.60 after posting quarterly results.