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S&P rises to fourth consecutive record close

Adam Shell and Kim Hjelmgaard
USA TODAY
Traders work on the floor of the New York Stock Exchange on Oct. 21, 2013.
  • S%26P 500 stock index tops 1750 for first time
  • Only 146%2C000 jobs created in September%2C below the 180%2C000 economists expected
  • Investors view weak jobs number as bullish%2C as it means Fed %27tapering%27 postponed longer

NEW YORK -- The U.S. stock market continued its record-setting 2013 run Tuesday after a weak September jobs report all but assures that the Federal Reserve will postpone the start of the "tapering" on its market-friendly bond-buying program until 2014.

The Standard & Poor's 500-stock index rose above the key 1,750 mark for the first time as it gained 10.01 points, or 0.6%, to close at an all-time high of 1,754.67. The small-company Russell 2000 index was also in record territory as it rose .

The Nasdaq composite hit fresh 13-year highs as it rose 9.52 points, or 0.2%, to 3,929.57. The Dow Jones industrial average gained 75.46 points, or 0.5%, to 15,467.66. The Dow has not yet taken out its previous closing high of 15,676.94.

Stocks were helped some strong third-quarter earnings reports from well-known stocks like DuPont.

Employers were forecast to have added 180,000 jobs in September, up from 169,000 in August. But the actual number came in low at 148,000. The unemployment rate was expected to remain at 7.3%. But it actually fell a tick, to 7.2%.

Today's not-so-good news on the jobs front was viewed positively by Wall Street because it means more and longer support for markets from the Fed.

"The economy is too fragile for the Fed to do much," says Sung Won Sohn, finance professor at California State University.

In a research report titled, 'Modest payrolls, patient Fed," Michael Gapen, an economist at Barclays, told clients that the bank now expects the Fed to push back its first taper of its asset purchases to March 2014. The bank previously was calling for tapering to start at the Fed's December meeting. Some Fed watchers say the central bank may be on the sidelines until mid-2014.

The weak jobs report, however, signals an economy growing at a modest pace at best, adds Sohn.

As a result, the combination of slow-growth and a sidelined Fed gave the U.S. government bond market a big lift.

The yield on the benchmark 10-year Treasury note, fell to 2.52%, well below its close of 2.61% Monday.

A drop in bond yields is also a plus for stocks.

"The Fed is still waiting to see noticeable improvement in hiring and it appears they are going to be waiting even longer," says Lindsey Piegza, chief economist at Sterne Agee.

On the heels of Netflix reporting a leap in subscribers Monday, its stock actually fell Tuesday, down about 9% to $322.55.

On Monday, the S&P 500 closed up a fraction of a point at 1,744.66. The Dow edged down 7.45 points, or 0.1%, to 15,392.20. The Nasdaq rose 5.77 points, or 0.2%, to 3,920.05.

Benchmark crude for November delivery was down $1.60 at $97.62 a barrel in electronic trading on the New York Mercantile Exchange. The November contract expires Tuesday.

Japan's Nikkei 225 index added 0.1% to 14,713..25 and Hong Kong's Hang Seng shed 0.5% to 23,315.99. Major benchmarks in Europe rose as the FTSE 100 index of leading British shares gained 0.6% to close at 6,695.66. Germany's DAX rose 0.9% to 8,947.46 and the CAC-40 in France gained 0.4% percent to 4,295.43.

Contributing: The Associated Press.

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