US STOCKS-Wall St rises on Fed hopes, farm machinery

                                

                                
 * U.S. economy sheds jobs for a fourth straight month
                                
 * Blue-chip Dow above 11,000 for first time since May 4
                                
 * Agricultural sector rallies on USDA corn crop forecast
                                
 * Dow up 0.6 pct, S&P up 0.6 pct, Nasdaq up 0.8 pct
                                
 * For up-to-the-minute market news see [STXNEWS/US]
 (Updates to late afternoon, changes byline)
                                
 By Leah Schnurr
                                
 NEW YORK, Oct 8 (Reuters) - The Dow rose above the 11,000
mark for the first time in five months on Friday as a weak jobs
report fueled expectations the Federal Reserve will take more
action to spur the U.S. economy.
                                
 The Fed's hint that it may do more quantitative easing has
commanded the attention of equities investors in recent weeks,
turning lackluster economic data into a potential positive. For
details, see [ID:nN08205203].
                                
 "It was almost as if the market was cheering for a bad
report to try to solidify that the Fed would engage in
quantitative easing," said Scott Marcouiller, chief technical
market strategist at Wells Fargo Advisors in St. Louis.
                                
 But that expectation was also weighed against comments from
St. Louis Fed President James Bullard, who said the Fed faces a
difficult decision at next month's policy meeting on whether to
offer further stimulus to a U.S. economy that is still growing
but only slowly. [ID:nN08199744]
                                
 "I think he said it's not in the bag that we're going to do
this," said Marcouiller.
                                
 Alcoa Inc <AA.N> boosted the Dow after its results beat
estimates, while agriculture-related shares surged in sync with
U.S. corn and soybean futures after the U.S. Department of
Agriculture said the corn crop is likely to be far smaller than
expected. [ID:nN08236238]
                                
 The Dow Jones industrial average <.DJI> gained 63.42
points, or 0.58 percent, to 11,012.00, rising above 11,000 for
the first time since May 4. The Standard & Poor's 500 Index
<.SPX> climbed 7.18 points, or 0.62 percent, to 1,165.24. The
Nasdaq Composite Index <.IXIC> rose 18 points, or 0.76 percent,
to 2,401.67.
                                
 A construction and farm machinery sector index <.15GSPMCHD>
rose 3 percent on the belief U.S. grain farmers will use some
of their profits from higher crop prices to buy new tractors
and harvesting equipment.
                                
  Deere & Co <DE.N> shares climbed 5.9 percent to $76.16 and
Agco Corp <AGCO.N> jumped 4.6 percent to $41.01.
                                
 Alcoa, which also increased its outlook for global aluminum
demand, gained 6.1 percent to $12.94, making it the biggest
percent gainer on the Dow.
                                
 Data showed the economy shed jobs in September for a fourth
straight month as government payrolls fell and private hiring
slowed.
                                
 As the surprise drop in the government's non-farm payrolls
report increased the likelihood of more quantitative easing by
the Fed, the dollar weakened while commodity prices rose.
                                
 The Reuters Jefferies CRB index <.CRB>, which covers 19
mostly U.S.-traded commodities, rose 2.7 percent.
                                
 Freeport-McMoRan Copper & Gold Inc <FCX.N> gained 4.5
percent to $95.53, while the S&P Materials index <.GSPM> shot
up 2.2 percent.
                                
 Options traders also remained confident about the market as
the volatility index continued to slide. The CBOE Volatility
index <.VIX>, Wall Street's favorite fear gauge, fell 4.6
percent to 20.58, the lowest since May.
                                
 (Editing by Kenneth Barry)