Feb. 13 (Bloomberg) — U.S. stocks pared declines, after equities snapped a four-day rally yesterday, as investors weighed data showing retail sales declined in January while more Americans than forecast filed for unemployment benefits.
Cisco Systems Inc. dropped 4.6 percent after forecasting quarterly sales below some estimates. Whole Foods Market Inc. slumped 8.6 percent after posting profit that trailed projections and lowering its full-year forecast. Time Warner Cable Inc. jumped 6.7 percent as Comcast Corp. agreed to acquire the cable company for $45.2 billion.
The S&P 500 slipped 0.1 percent to 1,818.35 at 10:18 a.m. in New York, after falling as much as 0.6 percent earlier. The Dow Jones Industrial Average lost 19.87 points, or 0.1 percent, to 15,944.07. Trading in S&P 500 stocks was 1.7 percent above the 30-day average during this time of the day.
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Retail sales in the U.S. fell 0.4 percent in January after a revised 0.1 percent drop the prior month, according to the Commerce Department, as inclement weather kept consumers away from auto showrooms and stores. The median forecast of 86 economists surveyed by Bloomberg called for no change. Sales excluding automobiles were unchanged.
Jobless claims increased by 8,000 to 339,000 in the week ended Feb. 8 from 331,000 in the prior period, a Labor Department report showed. The median forecast of 52 economists surveyed by Bloomberg called for a decrease to 330,000.
The S&P 500 rallied earlier this week as comments by the Federal Reserve's Janet Yellen fueled optimism the economy can weather further stimulus cuts. Yellen, delivering her first public remarks as Fed chair, said economic growth has strengthened and there is "broad improvement" in the labor market.
Yellen 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.
On Track
St. Louis Fed President James Bullard said yesterday that he expects economic expansion in 2014 of 3 percent or better, and that the central bank is on track to continue tapering asset purchases, with the program ending later this year.
Federal Open Market Committee officials have twice reduced the size of the monthly asset-purchase program, lowering bond buying to $65 billion in February from $85 billion last year. Three rounds of stimulus under previous Chairman Ben S. Bernanke have helped push the S&P 500 as much as 173 percent higher from a 12-year low in 2009.
The benchmark gauge closed at a record on Jan. 15 and then dropped 5.8 percent through Feb. 3 on signs of slowing growth in China and a rout in emerging-market currencies. The S&P 500 rallied 4.5 percent through Feb. 11 amid optimism about U.S. economic growth. The index is currently about 2 percent below its high.
Earnings Season
A total of 17 companies in the S&P 500 were scheduled to post earnings today, including Cliffs Natural Resources Inc. and American International Group Inc. Almost 76 percent of those that have reported results this season have exceeded analysts' profit estimates, 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, rose 1.5 percent to 14.51 for its first advance in six days.
Six out of 10 main industries in the S&P 500 slumped. Industrial, energy and financial shares had the biggest drops, falling at least 0.3 percent.
Cisco declined 4.6 percent to $21.80. The world's biggest maker of network routers and switches said weakness in emerging markets and a slump in demand from telecommunications companies will lead to a revenue decline of 6 percent to 8 percent in the quarter through April. That indicates sales of $11.2 billion to $11.5 billion, while analysts projected $11.3 billion on average, according to data compiled by Bloomberg.
Whole Foods
Whole Foods fell 8.6 percent to $50.70. The largest U.S. natural-goods grocer said quarterly net income rose 8.2 percent to $158 million, or 42 cents a share, from a year earlier. That missed the 44-cent average of estimates compiled by Bloomberg.
Time Warner Cable jumped 6.7 percent to $144.33. Its acquisition by Comcast combines the two largest U.S. cable companies in an all-stock transaction. Under the deal, investors of Time Warner Cable will receive 2.875 new Comcast stock for each of their shares.
Based on Comcast's closing price yesterday, the transaction values each Time Warner Cable share at $158.82, a 17 percent premium. Comcast fell 3.7 percent to $53.21 today.
Nvidia Corp. added 1.5 percent to $17.09. The maker of graphics processors forecast fiscal first-quarter sales that may exceed some analysts' predictions as demand for cards used in high-end gaming computers helps make up for a decline in laptops.
CBS Corp., owner of the most-watched television network, increased 4.1 percent to $64.40. The company reported better- than-estimated quarterly profit and expanded its stock buyback by $1.5 billion.
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