Nov. 25 (Bloomberg) -- U.S. stocks gained, erasing yesterday’s drop, after jobless claims fell more than forecast and personal income and spending topped economists’ estimates.

Home Depot Inc., Macy’s Inc. and Target Corp. advanced after the government said the number of Americans filing claims for unemployment benefits slid last week to 466,000, the fewest since September 2008. Freeport-McMoRan Copper & Gold Inc. and Newmont Mining Corp. rallied as gold rose to a record and copper advanced as the dollar touched a 15-month low versus the euro.

“The claims number is probably what’s moving markets this morning, although personal spending data’s very strong, personal income’s very strong,” said John Canally, a Boston-based economist at LPL Financial, which oversees $269 billion. “Overall, it’s a pretty good package of data and should have people revising up their fourth quarter GDP estimates.”

The Standard & Poor’s 500 Index added 0.1 percent to 1,107.24 at 9:31 a.m. in New York. The Dow Jones Industrial Average climbed 0.1 percent to 10,440.59. The Nasdaq Composite Index increased 0.3 percent to 2,173.19.

Stocks rallied after personal income rose 0.2 percent in October, higher than the 0.1 percent median estimate in a Bloomberg survey, and personal spending increased 0.7 percent, topping the 0.5 percent median estimate. Federal Reserve policy makers yesterday raised their forecast for 2010 economic growth to a range of 2.5 percent to 3.5 percent, from a previous projection of 2.1 percent to 3.3 percent.

64 Percent Rebound

U.S. stocks fell yesterday, pulling the Dow average down from a 13-month high. The S&P 500 has soared 64 percent from a 12-year low on March 9, leaving the index valued at more than 22 times its companies’ reported operating earnings, near the highest level since 2002, according to weekly data compiled by Bloomberg.

A Commerce Department report at 10 a.m. may show purchases of new houses rose 0.5 percent last month to a 404,000 annual pace, according to the median forecast of economists in a Bloomberg survey.

Newmont Mining advanced 1.4 percent to $54.08. Barrick Gold, the world’s largest gold producer, increased 2.2 percent to $43.93. Freeport-McMoRan Copper & Gold Inc., the world’s largest publicly traded copper producer, climbed 0.9 percent to $86.36.

Gold climbed to a record as the Financial Chronicle newspaper reported India may buy more bullion for its central bank reserves. Copper, lead, nickel and tin were among metals increasing in London.

Tiffany Jumps

Tiffany & Co. surged 4.4 percent to $43.68. The world’s second-largest luxury jeweler had third-quarter profit from continuing operations of 33 cents a share on an adjusted basis. Analysts surveyed by Bloomberg had estimated profit of 24 cents a share on average.

Deere & Co. fell 1.5 percent to $51.50. The world’s largest maker of agricultural equipment forecast 2010 profit of about $900 million, less than the $1.15 billion average estimate of 13 analysts surveyed by Bloomberg. The company had a fourth-quarter net loss of $222.8 million, or 53 cents a share.

To contact the reporters on this story: Sapna Maheshwari in New York at smaheshwar11@bloomberg.net.

Last Updated: November 25, 2009 09:34 EST