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US stocks rise as signs of prolonged stimulus emerge

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US stocks rise as signs of prolonged stimulus emerge

US stocks continued to rise and the Standard & Poor’s 500 set a fresh record high after the Labor Department said employers hired fewer workers than projected in September.

Job growth slowed to 148,000 in September following a revised 193,000 gain the previous month, the report showed. Economists expected US employers to add 180,000 payrolls last month, according to a median estimate collected by Bloomberg News. The unemployment rate fell to its lowest level since November 2008, nudging down 0.1 percentage point to 7.2 percent. Slower than projected job growth shows the world’s largest economy was losing steam leading up to the partial government shutdown, which lasted 16 days and shaved more than half a percent from national gross domestic product.

A decline in job creation, combined with the effects of the budget impasse, has shifted monetary policy expectations on the part of the investing public. Market participants are growing more confident the Federal Reserve won’t hurry to reign in record stimulus, which has swelled the Fed balance sheet to over $3.6 trillion.

The S&P 500 advanced 0.57 percent to 1,754.67, extending its record high. The benchmark index is on its way to its best annual increase in ten years, already doubling from its 12-year low in March 2009, thanks in large part to prolonged federal stimulus. The Dow Jones Industrial Average advanced more than 75 points to 15,467.70, with 19 of its 30 members reporting gains. The index was led higher by The Walt Disney Company (NYSE:DIS) and Proctor & Gamble (NYSE:PG) , which advanced at least 1.79 percent.

The NASDAQ Composite managed to eke out gains after Apple (NASDAQ:AAPL) shares fell on the unveiling of the fifth generation iPad. The “iPad Air” will weigh just 1 pound, and will be made available November 1 for US$499. NASDAQ closed 14 points higher at 3,929.57.

The flow of economic data will continue for the rest of the week amid the earnings season. Around three-quarters of the companies to report earnings so far have beat analysts’ forecasts. The earnings of the 131 companies to report have grown 5.5 percent, according to Bloomberg.

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