* Initial claims dip, personal income and spending climb
* Market lauds remarks by Fed's Dudley; Lockhart to speak
* ConAgra jumps after raising its outlook, PayChex drops
* Indexes up: Dow 0.7 pct, S&P 0.6 pct, Nasdaq 0.8 pct
By Ryan Vlastelica
NEW YORK, June 27 U.S. stocks climbed for a
third straight day on Thursday as concerns receded that the
Federal Reserve would begin to unwind its stimulus efforts
earlier than expected.
A decline in weekly jobless claims and improvements in
consumer spending and income added to the positive tone and
contributed to the S&P 500's best three-day run since January.
Equities have been since Fed Chairman Ben Bernanke said last
week the central bank's bond-buying program, credited with
fueling the market's 13-percent jump in 2013, would be reined in
earlier than expected if economic conditions improve.
With Wall Street so closely tethered to the direction of Fed
policy, uncertainty over the timing of a pullback to the program
sparked a market decline of as much as 4.8 percent in the days
following Bernanke's remarks.
"The Fed had to be shocked at how much of a move Bernanke's
testimony generated ... so now it is trying to alter
expectations," said Nick Sargen, chief investment officer at
Fort Washington Investment Advisors in Cincinnati.
William Dudley, head of the New York Federal Reserve, said
Thursday the Fed's asset purchases would be more aggressive than
the timeline Bernanke had outlined if U.S. economic growth and
the labor market prove weaker than expected.
Dudley stressed that slowing the pace of the Fed's bond
buying would depend not on calendar dates but on the economic
outlook, which remained unclear.
"The Fed got ahead of itself talking about tapering, since
the data remains very mixed but consistent with the sub-par two
percent growth trend," said Sargen, who helps oversee $45
billion. "The message now is that investors need to hang on."
Dudley's comments were echoed by Dennis Lockhart, the
president of the Atlanta Federal Reserve, who said it would be
appropriate for stimulus to be pulled back if the economy
performs as expected, though the fate of the program would be
dependent on economic performance.
The Dow Jones industrial average was up 97.94 points,
or 0.66 percent, at 15,008.08. The Standard & Poor's 500 Index
was up 10.33 points, or 0.64 percent, at 1,613.59. The
Nasdaq Composite Index was up 28.20 points, or 0.84
percent, at 3,404.43.
While the S&P remains more than 3 percent below an all-time
closing high reached in May, it has rallied 2.7 percent over the
past three sessions.
Initial claims for state unemployment benefits dropped
slightly less than expected in the latest week, to a seasonally
adjusted 346,000. Analysts were looking for initial claims of
A separate report showed consumer spending rose 0.3 percent
last month while incomes grew 0.5 percent, the largest gain
since February. Pending home sales rose 6.7 percent to their
highest since December 2006.
In corporate news, ConAgra Foods Inc rose 5.3
percent to $35.13 as the best performer on the S&P 500 after the
food manufacturer reported a quarterly profit slightly ahead of
Wall Street estimates and raised its long-term outlook.
Bed Bath & Beyond Inc dipped 0.2 percent to $69.86
a day after reporting better-than-expected first-quarter sales,
though profits were below forecasts.
On the downside, PayChex was among the biggest
percentage decliners on the S&P after reporting results, losing
5.3 percent to $35.96.
Gold miner stocks advanced as prices of the precious metal
edged higher following a 12-percent drop over the past eight
sessions. U.S.-listed shares of Barrick Gold advanced 3
percent to $15.20 and Freeport-McMoRan Copper & Gold
added 2.3 percent to $27.46. The NYSE gold bugs index
climbed 2.2 percent.