By  on June 26, 2009

Retail shares led the market higher Thursday, rising 3.8 percent despite an increase in the number of jobless claims last week.

In its strongest move since June 1, the S&P Retail Index climbed 11.71 points to 323.05 as the Dow Jones Industrial Average rose 2.1 percent, or 172.54 points, to 8,472.40.

Retail stocks were encouraged by better-than-expected first-quarter results from Christopher & Banks Corp., ahead 15.6 percent to $6.36, and Bed Bath & Beyond Inc., which was up 9.5 percent to $31.08, as well as the well-received deal to combine The Dress Barn Inc. and Tween Brands Inc. (See related story, this page).

Other gainers included Saks Inc., up 6.7 percent to $3.99; J.C. Penney Co. Inc., 6 percent to $28.20; The TJX Cos. Inc., 5.2 percent to $31.81, and Target Corp., 4.2 percent to $40.31.

But the economic underpinning of consumer spending remains a big question mark headed into the second half. The number of people making jobless claims rose 15,000 last week to a seasonally adjusted 627,000. Unemployment is at a 26-year high of 9.4 percent and is expected to rise.

Stifel Nicolaus analyst Richard Jaffe said unseasonably cold weather and continued uncertainty about the economy could damage June comparable-store sales.

“The consumer is still very cautious with her spending and little has changed regarding the outlook for U.S. economic improvement,” Jaffe said.

Leaner inventories also may restrain sales. “June is typically the start of spring clearance and with retailers operating with reduced inventories and less clearance merchandise than last year, there simply isn’t enough merchandise to drive comp sales,” he said in a research note.

Internationally, stocks were mixed with the Hang Seng Index up 2.1 percent in Hong Kong, the CAC 40 down 0.7 percent in Paris and the FTSE off 0.6 percent in London.

Shares of LVMH Moët Hennessy Louis Vuitton fell 1.4 percent to 55.06 euros, or $77.36, as PPR advanced 0.3 percent to 56.90 euros, or $79.95.

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