* Payrolls data well above expectations
* Santarus jumps on buyout deal
* Disney falls after earnings
* Futures: Dow off 39 pts, S&P off 3.5 pts, Nasdaq up 2.25 pts
By Chuck Mikolajczak
NEW YORK, Nov 8 (Reuters) - U.S. stocks were set for a lower open on Friday, after an unexpectedly strong payrolls report increased the possibility the Federal Reserve could begin to scale back its stimulus before the end of the year.
Employers added 204,000 new jobs to their payrolls 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 and the unemployment rate ticking up a tenth of a percentage point to 7.3 percent.
The stronger than expected data, coupled with Thursday's better-than-expected gross domestic product data, 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. Immediately this is a case of the stock market taking good news as bad news," said Cameron Hinds, Regional CIO for Wells Fargo Private Bank in Omaha, Nebraska.
"We will see what happens behind the doors at the Fed, but certainly there will be some reassessment of at least the possibility of a December and/or January tapering."
The benchmark S&P index is up 22.5 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.
Later in the session at 9:55 a.m. (1455 GMT), investors will eye the Thomson Reuters/University of Michigan preliminary November consumer sentiment index. Expectations call for a reading of 74.5 compared with 73.2 in the final October report.
S&P 500 futures fell 3.5 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures lost 39 points and Nasdaq 100 futures added 2.25 points.
Santarus Inc surged 38.2 percent to $32.08 in premarket trade after Salix Pharmaceuticals Ltd agreed to buy the drugmaker for about $2.6 billion.
Walt Disney Co declined 1.3 percent to $66.30 before the opening bell after posting quarterly results.