Jan. 9 (Bloomberg) — U.S. stocks climbed, paring this year's loss for the Standard & Poor's 500 Index, as Macy's Inc. rallied and jobless claims fell before the start of corporate earnings season.
Macy's rallied 7.5 percent after forecasting profit that beat analysts' estimates. J.C. Penney gained 4.8 percent after Piper Jaffray Cos. recommended buying the shares. Bed Bath & Beyond Inc. plunged 11 percent after projecting earnings that missed analysts' predictions.
The S&P 500 advanced 0.2 percent to 1,841.27 at 9:49 a.m. in New York. The Dow Jones Industrial Average climbed 25.04 points, or 0.2 percent, to 16,487.78. Trading in S&P 500 stocks was 20 percent above the 30-day average at this time of day.
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"It's a series of data points that are indicating that the economy continues to gather some strength," Dan Veru, the chief investment officer who helps oversee $4.5 billion at Palisade Capital Management LLC, said by phone from Fort Lee, New Jersey. "It's a slow progression, but it's progress nonetheless. I'm optimistic that earnings are going to be improving, and more importantly that the guidance for 2014 is going to improve."
The S&P 500 fell 0.6 percent in 2014 through yesterday, after climbing 30 percent last year, the most since 1997. Three rounds of Federal Reserve stimulus have helped propel the S&P 500 higher by as much as 173 percent from a 12-year low in 2009.
Equities slipped yesterday as minutes from the Fed's latest meeting fueled concern that stimulus cuts may be accelerated. Officials saw diminishing economic benefits from the central bank's bond-buying program, according to the minutes, which didn't describe a set schedule for the pace of reductions, although "a few" officials mentioned the need for a "more deterministic path."
Fed tapering
The Fed announced after the December meeting that it would begin trimming monthly bond buying by $10 billion to $75 billion this month as the U.S. economy continues to improve.
Data today showed applications for U.S. unemployment benefits declined by 15,000 to 330,000 in the period ended Jan. 4. The median forecast of 47 economists surveyed by Bloomberg projected 335,000. The data can be volatile after the holidays as temporary workers are dismissed, a Labor Department spokesman said as the report was released.
A report from the ADP Research Institute in Roseland, New Jersey, yesterday showed companies added 238,000 workers in December, the biggest increase since November 2012. A Labor Department report tomorrow may show total payrolls rose by 196,000 last month, according to a Bloomberg survey median. That would bring the total for the year to 2.27 million, the most since 2005.
Alcoa Inc., the largest U.S. aluminum maker, reports its quarterly results after the close of trading today. Analysts predict that companies in the S&P 500 will increase their earnings by 9.7 percent on average this year and their sales by 3.8 percent, according to estimates compiled by Bloomberg.
'Tipping point'
"We are at a tipping point — if not a turning point — where markets will start to be driven by earnings per share and not price-to-earnings ratios," said Romain Boscher at Amundi Asset Management in Paris, which oversees about $1 trillion.
The equity benchmark trades at 15.5 times estimated earnings, more than the average multiple of 14.1 over the last five years, data compiled by Bloomberg show.
JPMorgan Chase & Co., Bank of America Corp. and Goldman Sachs Group Inc. will all post their results next week.
Macy's jumped 7.5 percent, the most in the S&P 500, to $55.71 after forecasting profit per share in the 12 months through January 2015 of $4.40 to $4.50. That beat the $4.36 average analyst estimate compiled by Bloomberg. The department- store chain also announced job cuts and other cost-saving measures that it said will save about $100 million a year.
Penney Gains
J.C. Penney climbed 4.8 percent to $7.72. The shares sank 10 percent yesterday after the company published a two-paragraph statement on holiday results that didn't include sales data, raising doubts about its turnaround. The brokerage said investors had overreacted and upgraded the retailer to overweight from neutral, citing the company's decision to reiterate its guidance.
Twitter Inc. gained 1.5 percent to $60.19, snapping three straight days of declines. The owner of the microblogging website lost 14 percent from Jan. 6 through yesterday.
Bed Bath & Beyond slumped 11 percent to $70.55. The retailer projected fourth-quarter earnings of $1.60 to $1.67 a share, less than the $1.79 that analysts had estimated. The company also reported net income of $1.12 a share for its third quarter, which ended Nov. 30. That missed the average analyst projection of $1.16, according to data compiled by Bloomberg.
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