Feb. 14 (Bloomberg) — Stocks rose, with the Standard & Poor's 500 Index headed toward a second straight weekly advance, amid better-than-forecast earnings and speculation a disappointing factory report may mask economic strength.
Occidental Petroleum Corp. gained 2.9 percent after saying it will split its operations in California as one of the final steps of a breakup plan. Cliffs Natural Resources Inc. and Campbell Soup Co. added more than 3.7 percent as earnings beat forecasts. Men's Wearhouse Inc. tumbled 7.2 percent after its acquisition target, Jos. A. Bank Clothiers Inc., proposed to buy the Eddie Bauer brand.
The S&P 500 rose 0.3 percent to 1,834.45 at 10:39 a.m. in New York. The Dow Jones Industrial Average added 56.93 points, or 0.4 percent, to 16,084.52. Trading in S&P 500 stocks was 13 percent below the 30-day average during this time of the day.
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"The weather is so horrible everywhere, much of the data could be very distorted," Bruce Bittles, chief investment strategist at RW Baird & Co., said by telephone from Sarasota, Florida. His firm oversees $120 billion. "The Fed is going to wait until the weather clears and until we get some more numbers in March and April to consider the data. The picture will start to clear on how great or how poor the economy is."
The S&P 500 has jumped 5.4 percent from a three-month low on Feb. 3 on speculation economic growth is strong enough to withstand further cuts to Federal Reserve monetary stimulus. The index is less than 1 percent below its all-time high reached on Jan. 15.
Fed stimulus
Equities rallied this week, with the S&P 500 gaining 2.1 percent, as Fed Chair Janet Yellen said economic growth has strengthened and there is "broad improvement" in the labor market. She repeated the Fed's outlook for further stimulus reductions in "measured steps," adding that only a "notable change in the outlook" for the economy would prompt policy makers to slow the pace.
U.S. industrial output unexpectedly declined in January by the most since May 2009, adding to evidence severe winter weather weighed on the economy. The 0.8 percent decrease at manufacturers followed a revised 0.3 percent gain the prior month that was weaker than initially reported, figures from the Fed showed. The median forecast in a Bloomberg survey of economists called for a 0.1 percent advance.
The Thomson Reuters/University of Michigan preliminary index of U.S. consumer sentiment was unchanged in February from a month earlier at 81.2. The median estimate in a Bloomberg survey of 74 economists called for a decline to 80.2.
'Quite mixed'
"Data has been quite mixed since the start of the year," Julian Chillingworth, who helps oversee about $37 billion as chief investment officer at Rathbone Brothers Plc in London, said in an interview. "The U.S. economy will probably be fine this year. But the year will be about the good news versus the bad news and not so much the straight line up we had in 2013."
Equities have also climbed this week amid better-than- forecast corporate earnings. Seven S&P 500-listed companies reported earnings today. Seventy-five percent of the 400 companies that have posted results this season beat analysts' estimates for profit and 64 percent exceeded sales projections, data compiled by Bloomberg show.
Earnings at S&P 500 companies rose by 8.3 percent in the fourth quarter of 2013 and sales by 2.7 percent, according to analyst estimates compiled by Bloomberg.
The Chicago Board Options Exchange Volatility Index, the gauge of S&P 500 options known as the VIX, fell 4.2 percent to 13.54. The gauge has fallen for seven straight days, the longest stretch since July.
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