Stocks rose on Thursday after several top U.S. retail chains reported better-than-expected sales in June and new claims for jobless benefits fell more than forecast.
Investors built on gains in the last session when the S&P 500 index rallied more than 3 percent after a positive earnings outlook from State Street Corp fueled hopes of a stronger earnings season.
While some analysts cautioned that new claims for benefits are still elevated, many welcomed stronger June retail sales as a sign consumers were still spending, albeit helped by the warm weather and holiday promotions.
The data we're getting this morning is confirmation that June wasn't a terrible month, and July starts the back-to-school (period), said John Canally, investment strategist and economist for LPL Financial in Boston. It's good to see there was some demand in June.
Canally said the jobless claims data, however, was muddied by holidays, the Gulf of Mexico oil spill, and the expiration of unemployment benefits that had not been extended.
Shares in department store operator JC Penney Co and teen apparel retailer Abercrombie & Fitch Co jumped as much as 7 percent.
The Dow Jones industrial average <.DJI> gained 60.77 points, or 0.61 percent, to 10,079.05. The Standard & Poor's 500 Index <.SPX> rose 6.91 points, or 0.65 percent, to 1,067.18. The Nasdaq Composite Index <.IXIC> climbed 14.70 points, or 0.68 percent, to 2,174.17.
The S&P 500 is down around 13 percent from a peak in April, with investors concerned about a slowdown in economic growth in the United States, Europe and China.
Retailers said June same-store sales were helped by warm weather and promotions tied to the Memorial Day holiday.
JC Penney Co shares jumped 6.5 percent to $23.22, and Abercrombie & Fitch Co gained 6.9 percent to $35.14 after posting June same-store sales data. For more details, see
Top U.S. warehouse club operator Costco Wholesale Corp's June same-store sales rose 4 percent but just missed Wall Street's expectations. The shares rose 2 percent to $55.31.
Initial claims for state unemployment benefits dropped 21,000 to a seasonally adjusted 454,000 in the week ended July 3, the lowest level since early May, the Labor Department said.
Dan Cook, senior market analyst at IG Markets in Chicago cautioned the consumer would remain under pressure while unemployment remained high.
I have to believe that the consumer will remain stressed until the job market improves, he said. I don't think we're going to see real growth for a while because right now there's nothing to support that.
(Additional reporting by Ryan Vlastelica and Leah Schnurr; Editing by Padraic Cassidy)