US STOCKS-S&P 500 extends rally to 5th week

                                

                                
 * Benchmark S&P index rises 3.6 percent in week
                                
 * U.S. non-farm payrolls surge in October
                                
 * Kraft limits gains in Dow after weak quarterly revenue
                                
 * Indexes up: Dow 0.1 pct, S&P 0.4 pct, Nasdaq 0.1 pct
                                
 * For up-to-the-minute market news see [STXNEWS/US]
  (Updates to close)
                                
 By Ryan Vlastelica
                                
 NEW YORK, Nov 5 (Reuters) - U.S. stocks rose for the fifth
straight week as investors took heart from Republican gains in
the elections and on news that more cheap money from the
Federal Reserve was on the way.
                                
 Following a 3.6 percent rise in the S&P 500 this week,
investors locked in profits on Friday, offsetting an
unexpectedly strong payrolls report that reinforced optimism
about the economy. The market closed slightly higher.
                                
 "Because of these gains, I feel there's a relatively modest
correction that's just around the corner," said King Lip, chief
investment officer at Baker Avenue Asset Management in San
Francisco. "But there's a lot of optimism out there, and the
jobs picture is looking better."
                                
 A government jobs report suggested the sluggish recovery
could be picking up steam. Non-farm payrolls rose a solid
151,000 in October, the first gain since May and more than
double economists' expectations. For details, see
[ID:nN04265378]
                                
 GOOD NEWS FOR MARKET
                                
 The news came two days after the Fed detailed a plan to buy
$600 billion in government bonds over coming months to boost
the economy, and three days after Republicans made gains in
U.S. elections, signaling the possibility of a more
business-friendly Congress.
                                
 "Good news is good news. The commodity markets and the
stock markets all got everything they wanted this week, which
is incredible," said Jeffrey Friedman, senior market strategist
at Lind-Waldock in Chicago.
                                
 The Dow Jones industrial average <.DJI> edged up 9.24
points, or 0.08 percent, at 11,444.08. The Standard & Poor's
500 Index <.SPX> added 4.78 points, or 0.39 percent, to
1,225.84. The Nasdaq Composite Index <.IXIC> rose 1.64 points,
or 0.06 percent, to 2,578.98.
                                
 The S&P 500 has risen about 16 percent since September and
indexes surged to two-year highs on Thursday, but investors
began to question how long the upward trend could continue
without a breather.
                                
 In a technical barrier, the 61.8 percent retracement of the
slide in the S&P 500 from the historic highs in 2007 to the
lows in March 2009 is 1,228.74, near Friday's session high of
1,227.08.
                                
 Kraft Foods Inc <KFT.N> was the second biggest percentage
loser on the Dow, falling 2.2 percent to $31.08 a day after it
reported third-quarter revenue that was weaker than expected
and commented on its 2011 forecast. [ID:nN04194868]
[ID:nN05295408]
                                
 After the closing bell, Boeing Co <BA.N> fell 2.5 percent
to $69.51 in extended trading on an Aviation Week report that
said the Dow component expects delivery delays of its 787
aircraft. [ID:nWEN2675]
                                
 The S&P telecommunications <.GSPL> and healthcare sectors
<.GSPA> led the downdraft, with losses of 0.6 percent and 0.5
percent, respectively. Pharmaceutical companies were also
lower, with Merck & Co <MRK.N> down 2.6 percent to $35.70 and
Pfizer Inc <PFE.N> off 1.2 percent to $17.18.
                                
 Financials substantially outperformed other sectors, with
the S&P financial index <.GSPF> advancing 2.1 percent. The Fed
is expected to soon allow some healthy banks to increase
dividend payments, people familiar with the decision said late
Thursday.
                                
 JPMorgan Chase & Co <JPM.N> gained 2.9 percent to $40.94
and Bank of America <BAC.N> shot up 1.9 percent to $12.36.
Option traders furiously snapped up calls on the Financial
Sector Sector SPDR fund <XLF.P>, which rose 1.8 percent.
                                
 More than four stocks rose for every three that fell on the
New York Stock Exchange, while on the Nasdaq, about five stocks
rose for every four that fell.
                                
 Volume was strong, with about 9.40 billion shares traded on
the New York Stock Exchange, the American Stock Exchange and
Nasdaq, above the year-to-date daily average of 8.73 billion.
 (Reporting by Ryan Vlastelica; Additional reporting by Leah
Schnurr; Editing by Kenneth Barry)