Although it is too soon to tell if the worst of the credit crisis may be over, Wall Street rallied on Tuesday following upbeat news in the banking sector, a retreat in commodities prices and better-than-expected manufacturing data.
The Dow Jones Industrial average gained more than 390 points to close at 12,656.36, while the broader S&P 500 jumped 3.6 percent to 1,370.18. The S&P Retail Index climbed 5.8 percent to hit 407.10.
Leading the retailers pack was Talbots Inc., which earlier in the day released a plan to turn around its flailing business. Talbots spiked 11.4 percent to close at $12.01.
Midtier department stores also saw steep rebounds. After slashing earnings guidance last week, J.C. Penney rose 6.4 percent to $40.12, while Kohl's Corp. increased 6.3 percent to $45.59. Macy's Inc. grew 7 percent to $24.67, and Sears Holdings Corp. was up 7.2 percent to end the day at $109.47.
In the specialty sector, Lululemon Athletica Inc. shot up 11 percent to $31.57 on analysts' reports, which said they do not expect to see a slowdown at the athletic apparel retailer when it reports fourth-quarter earnings on Wednesday.
J. Crew Group increased 7.4 percent to $47.42, while teen retailer Abercrombie & Fitch rose 4.9 percent to $76.69. Urban Outfitters increased 5.2 percent to $32.99, and Limited Brands was 6.4 percent higher to $18.20.
Retail giant Wal-Mart Stores gained 2.7 percent to $54.08, while rival Target increased 5.1 percent to close at $53.27.
Department store Gottschalks was one of the rare decliners of the day, sinking 7 percent to $2.78, while Wilsons The Leather Experts fell 33.4 percent to end the day at 14 cents.
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