By  on March 23, 2010

Retail stocks advanced 1.2 percent Monday, outpacing the market and returning to growth after a one-day hiatus.

Investor sentiment was buttressed Monday by Williams-Sonoma Inc., which posted a sevenfold rise in fourth-quarter profits and was rewarded with a 12.3 percent stock jump. Tiffany & Co.’s profits also grew, but the stock managed only a modest rise after missing analysts’ estimates.

The S&P Retail Index, which broke a seven-session winning streak Friday, increased 5.51 points to 450.99, as the Dow Jones Industrial Average gained 0.4 percent, or 43.91 points, to 10,785.89.

Dillard’s Inc. stock advanced 4.5 percent to $23.86, after the department store got a vote of confidence from Moody’s Investors Service. The bond agency upgraded its probability of default rating on the firm to “B2” from “B3” and changed the outlook to “stable” from “negative.” The firm’s corporate family rating was affirmed at “B2,” indicating the company’s debt is still considered to be speculative and “subject to high credit risk,” according to Moody’s rating scale.

“Dillard’s successful efforts to better manage its retail operations through the challenging consumer environment resulted in improved credit metrics,” said Maggie Taylor, debt analyst at Moody’s. “We expect that the company will sustain this level of operating performance for the next 12 to 18 months.”

Moody’s said the company has “very good liquidity,” but its credit rating is constrained by a “history of weak and inconsistent operating performance.”

European equity markets were mixed as investors waited to see if Europe would come to the aid of debt-laden Greece.

The Athex Composite Index fell 1.9 percent to 2,010.22 in Athens as the FTSE 100 dipped 0.1 percent to 5,644.54 in London and the CAC 40 rose 0.07 percent to 3,928 in Paris.

Asian investors pushed the Hang Seng Index down 2.1 percent to 20,933.25 in Hong Kong as the SSE Composite Index inched up 0.2 percent to 3,074.58 in Shanghai and the Nikkei 225 rose 0.8 percent to 10,824.72 in Tokyo.

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