The S&P 500 Retailing Industry Group rose 1.5 percent to close above the 900 mark for the first time since April 3 amid signs of more vigorous, less promotional retail conditions.
The index ended the day at 902.28, and the increase ranked among the seven strongest of the year.
The Dow Jones Industrial Average came within less than 2 points of hitting the 17,000 mark in early afternoon trading before closing at 16,956. 07 for a 0.8 percent increase. The S&P 500 was up 0.7 percent to 1,973.32 for its 23rd record high close of 2014.
The rise in retail shares came as the International Council of Shopping Center and Goldman Sachs reported the strongest increase in weekly sales in two-and-a-half years, with volume for the week ended Saturday up 4.6 percent versus the 2013 week. ICSC said sales at department and apparel stores were described as “hefty.”
Retail stocks registered the largest gains among retail, fashion and beauty issues tracked by WWD, with The Wet Seal Inc. leading the charge with a 12.1 percent increase to close above $1 at $1.02. Citi Trends Inc. shares were up 7 percent to $22.97, Stage Stores Inc. up 4.6 percent to $19.55, Destination XL Group Inc. up 4.2 percent to $5.74 and Pacific Sunwear of California Inc. up 2.9 percent to $2.45.
Shares of American Apparel Inc. pulled back 3.3 percent to 87 cents after founder and ousted chief executive officer Dov Charney disclosed he had lifted his stake in the company to 43 percent, from 27.2 percent, through an agreement with Standard General.
Other U.S.-based stocks with declines included Elizabeth Arden Inc., down 2.9 percent to $20.79; Birks Group Inc., down 2.6 percent to $1.14; Urban Outfitters Inc., down 1.3 percent to $33.42, and Burlington Stores Inc., down 1 percent to $31.55.
European markets were also on the upswing, with the FTSE MIB in Milan leading the way.
The Italian market was up 1.3 percent to 21,563.43, followed by the FTSE 100 in London and the CAC 40 in Paris, both of which advanced 0.9 percent to 6,802.92 and to 4,461.12, respectively. The DAX in Frankfurt rose 0.7 percent to 9,902.41.
Retail and luxury stocks were uneven, with the day’s biggest gainers including Aeffe, up 4.7 percent to 1.27 euros; Carrefour, 1.4 percent to 27.32 euros, and Safilo Group, 1.4 percent to 16.16 euros.
Among those with declines were Koovs, 1.8 percent to 1.40 pounds; Tod’s, 1.9 percent to 91.20 euros; Mulberry Group, 1.2 percent to 7.50 pounds, and Gemfields, 2.4 percent to 46 pence.
The euro traded at $1.37 against the U.S. dollar while the pound fetched $1.71 and the Swiss franc equaled $1.12.