The FTSE 100 was trading at its highest levels since early August on Monday morning as equities extended gains made last week following the last-minute US deal to extend the debt ceiling.Upside was limited in morning trade, but London's benchmark index still managed to push past its September high to hit 6,638 by midday (+0.23%). The FTSE 100 has not closed above this level since August 2nd, when it finished the session at 6,647.87.Matt Basi, Head of UK Sales Trading at CMC Markets, said: "With High-Street stores seemingly intent on starting the Christmas shopping period earlier each year, equity traders too seem to be weighing an early start to festivities as we approach 'Santa rally' season."He said that with barriers to further upside apparently reduced, "the potential for record-breaking gains by year-end is strong".Both the S&P 500 in the US and DAX 30 in Germany closed at all-time highs on Friday, while Australia's S&P/ASX 200 reached fresh five-year highs overnight, as analysts predicted that the prolonged government shutdown in America would delay plans by the Federal Reserve to taper its quantitative easing programme.Markets are now be looking ahead to the delayed release of the September US employment report on Tuesday, which may be a big factor in the Fed's next move. Consensus forecasts are pointing to a 180,000 increase in US non-farm payrolls last month, higher than the 169,000 gain seen in August. However, the unemployment rate is expected to have remained unchanged at 7.3%.As for today, US existing home sales data is the only notable economic release due out and is expected to show a fall of 3.3% month-on-month in September, reversing sharply after the previous 1.7% increase.Defence stocks rise, RBS sinksQinetiQ, the defence technology and security firm, was a high riser this morning on weekend reports that it is putting its US division up for sale. The firm announced back in May that it was launching a strategic review into the unit.BAE Systems and Rolls-Royce were making gains after analysts at Citigroup said that they have a "positive outlook" on civil aerospace due to a ramp-up of new aircraft production and rising production of legacy aircraft.While the bank said it is still cautious on the wider defence sector, it said that the recent debt-ceiling deal has "removed some immediate risks overhanging US defence". Stocks exposed to the government defence outsourcing markets were in demand today, including Babcock, G4S and Smiths Group.Aerospace and defence engineer Senior also rose after saying strong order books at Airbus and Boeing had helped it keep profits on track since early July. N+1 Singer was providing a lift this morning after upgraded the stock to 'buy'.Hedge fund manager Man Group was also higher after Exane BNP Paribas raised its rating for the shares to 'buy'. Leading the downside was part-nationalised lender RBS after Chancellor George Osborne was quoted as saying that a decision over a 'good bank-bad bank' split will come within a few weeks. Nomura believes minority shareholders have "much to lose" from an unfavourable outcome of the review, with the government maintaining considerable leverage.Banking peers Barclays and Lloyds were also lower by midday.FTSE 100 - RisersG4S (GFS) 250.20p +3.39%BAE Systems (BA.) 457.30p +2.79%Vedanta Resources (VED) 1,065.00p +2.50%Babcock International Group (BAB) 1,236.00p +2.40%Rolls-Royce Holdings (RR.) 1,114.00p +2.01%Rexam (REX) 501.50p +1.87%Smiths Group (SMIN) 1,427.00p +1.78%Capita (CPI) 977.50p +1.72%Amec (AMEC) 1,123.00p +1.72%Burberry Group (BRBY) 1,549.00p +1.44%FTSE 100 - FallersRoyal Bank of Scotland Group (RBS) 353.00p -5.29%Marks & Spencer Group (MKS) 487.50p -1.54%Prudential (PRU) 1,245.00p -1.50%GKN (GKN) 366.10p -1.24%Barclays (BARC) 274.80p -1.10%Fresnillo (FRES) 978.00p -1.06%Kingfisher (KGF) 382.20p -0.78%Shire Plc (SHP) 2,519.00p -0.71%SABMiller (SAB) 3,137.50p -0.65%Old Mutual (OML) 199.30p -0.60%FTSE 250 - RisersQinetiQ Group (QQ.) 201.60p +3.97%Provident Financial (PFG) 1,631.00p +3.49%Informa (INF) 561.00p +3.41%Centamin (DI) (CEY) 52.75p +3.03%Drax Group (DRX) 665.50p +2.86%Atkins (WS) (ATK) 1,208.00p +2.81%KCOM Group (KCOM) 99.50p +2.79%Synergy Health (SYR) 1,063.00p +2.51%BTG (BTG) 391.30p +2.38%DCC (DCC) 2,715.00p +2.38%FTSE 250 - FallersDialight (DIA) 1,181.00p -2.15%Ocado Group (OCDO) 446.50p -1.82%Hochschild Mining (HOC) 163.10p -1.75%Wetherspoon (J.D.) (JDW) 744.00p -1.26%Entertainment One Limited (ETO) 246.20p -1.12%Betfair Group (BET) 1,014.00p -1.07%Cranswick (CWK) 1,078.00p -0.92%Perform Group (PER) 553.00p -0.90%Kenmare Resources (KMR) 22.80p -0.87%IP Group (IPO) 136.10p -0.87%BC