NEW YORK — Investors burst back from the Fourth of July weekend and sent stocks skyrocketing.

Buoyed by VF Corp.’s agreement to purchase Nautica Enterprises Inc., U.S. retail and apparel companies enjoyed the Monday rally. Strong earnings from Cache and an upgrade to Bebe Stores helped those firms establish new 52-week highs.

Having enjoyed barbeques and beer, investors loaded up on stocks, sending the Dow Jones Industrial Average up 146.58 points, or 1.6 percent, to 9,216.79. The technology-laced Nasdaq composite rose above 1,700 for the first time in 14 months, increasing 57.79 points, or 3.5 percent to 1,721.25, while the Standard & Poor’s Retail Index extended 7.86 points, or 2.4 percent, to 335.69. While fashion observers reacted to the new VF-Nautica connection, buyers in the broader markets reacted to signs of strength from the dollar and the semiconductor market.

Also contributing to the run-up in fashion-related issues, major retailers plan to report their June sales results this week and there’s hope that the more aggressive promotional stance and the warming weather later in the month in many regions spurred sales of warm weather merchandise and helped clear their floors for fall receipts.

“There could be a sense that inventory got cleaned out given the clearance sales, and those were effective,” Dana Telsey, a retail analyst with Bear Stearns, said of June sales. “You want to clear goods because inventory doesn’t increase in price the longer it sits on the shelf.”

Also helping the market’s rally were signs of strength in the U.S. dollar, which rose to a two-month high against the euro. The euro-dollar rate fell 1.4 percent to $1.13.

After battling inclement weather in the first quarter, Cache ended the second quarter on a sunnier note. The New York-based chain of women’s specialty stores said profits for the second quarter ended June 28 rose 19.6 percent to $3.5 million, or 37 cents a diluted share, compared to $3 million, or 31 cents, in the year-ago quarter. Results came in 5 cents ahead of Wall Street analysts’ best guess. Sales for the quarter were up 9.1 percent to $56 million from $51.3 million and same-store sales picked up 4 percent for the period.For the first half, profits rose 7.6 percent to $5.2 million, or 54 cents a diluted share, from $4.8 million, or 50 cents. Sales rang in at $103.8 million, a 5 percent increase over sales of $98.9 million in the comparable period last year, while comps for the six months rose 1 percent.

Shares of Cache rose to a new 52-week high of $19.27 before ending the day at $19.07, up $1.21 or 6.8 percent.

Shares of Bebe Stores, which sells trendy women’s clothing, jumped $1.50, or 7.2 percent, to $22.41 on Monday after the latest in a series of analyst upgrades. They hit a new 52-week high of $22.94 in intraday trading.

First Albany analyst Harry Ikenson upgraded Bebe to “buy” from “neutral,” raised his fourth-quarter earnings estimate to 12 cents from 8 cents per share and said he believes comps should rise 2.8 percent, above company expectations for flat comps. Bebe just concluded its fourth quarter.

Ikenson cited the resolution of production issues, which previously had resulted in lack of sufficient inventory, for the upgrade. “The product flow began to improve in April, improved further in May, and was even better in June,” Ikenson wrote in a research report. “Therefore, we believe the company is now poised to deliver positive comps, particularly given easy comparisons through March 2004.”

Ikenson noted he expects Bebe to report a 3 percent rise in June same-store sales.

On July 2, JP Morgan upgraded Bebe to “neutral” from “from underweight” and on June 24, SG Cowen upgraded it to “outperform” from “market outperform.” Bebe revised earnings expectations when it reported May sales on June 5.

Urban Outfitters also shattered its previous high after Sanders Morris Harris analyst Elizabeth Pierce raised her stock price target to $44 from $37. “The firm’s stock has had a great run, but there is still more upside,” Pierce said. “Their business is strong. They look differential and more compelling in terms of their merchandise in a sea of sameness.” Shares of UO finished the session ahead $1.45, or 3.9 percent to $38.40, down 30 cents from their new 52-week high reached earlier in the day.Pacific Sunwear was up 5.3 percent to $26.40 and hit a 52-week high of $26.48 earlier in the day.

Other retail gains came from: Aeropostale, up a powerful 11.2 percent to $24.35; Abercrombie & Fitch, up 6.8 percent to $29.95; Chico’s FAS, up 5.6 percent to $22.10; Coldwater Creek, up 7.5 percent to $15.19; Federated Department Stores, up 3.4 percent to $37.63; Hot Topic, up 3.1 percent to $27.60; Neiman Marcus, up 3 percent to $37.65; Shopko Stores, up 5.6 percent to $13.85; Tiffany, up 3.4 percent to $34.03, and Talbots, up 4.2 percent to $30.97.

On the manufacturing side, joining Nautica’s 27.2 percent increase and VF’s 4.6 percent ascension, Fossil added 6.8 percent to $25.68; Guess, was up 6.8 percent to $7.10, and Mossimo moved ahead 12.4 percent to $4.80.

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