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S&P raises outlook for JC Penney's credit

NEW YORK (AP) -- Standard & Poor's Ratings Services raised its outlook on J.C. Penney's credit to stable from negative on Monday, saying the department store's sales results show it has turned a corner.

"Performance has begun to stabilize, and we forecast further modest gains over the next year," said analyst David Kuntz. S&P rates J.C. Penney's credit at 'CCC+'. That rating is non-investment grade or "junk" status, seven notches below an investment grade rating.

On Wednesday J.C. Penney said revenue at stores open at least a year grew 2 percent in the fiscal fourth quarter. That was the first time in two years J.C. Penney reported improvement in that measurement. Revenue at stores open at least a year is considered an important indicator of retailer health because it excludes results from stores that have opened or closed in the last 12 months.

In the fourth quarter of 2012, J.C. Penney reported a 31.7 percent drop in sales at stores open at least a year.

The company's fiscal fourth quarter ended Feb. 1.

J.C. Penney Co. shares climbed 9.3 percent to $7.96 Monday. The stock is up 33.6 percent since Feb. 26.