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It's not often that the broad-based S&P 500 (SNPINDEX: ^GSPC ) can completely ignore an 844-point, 6.4%, swoon in Japan's tumbling Nikkei 225, but that's exactly what it did today in a big way! In spite of starting the day decisively in the red, initial jobless claims, and U.S. retail sales data, sent the markets remarkably higher.
Weekly initial jobless claims fell by 12,000 last week to a seasonally adjusted level of 334,000, once again nearing a five-year low. Fewer unemployment benefit filings are a positive sign that the job market is improving, and would lend credence that this rally may have legs.
U.S. retail data also surprised to the upside, delivering a 0.6% gain from April for the fastest growth we've seen since February. Notably strong continues to be auto-sector sales. If anything, this signals that higher-end products are still selling well despite higher payroll taxes reducing consumers' take-home pay.
By the end of the day the market had digested Japan's woes and our own domestic reports, and decided it was worth a huge 23.84 point (1.48%) gain, to close at 1,636.36. Although, if you thought these gains were impressive, you haven't seen anything relative to the following three stocks.
Leading the explosive charge higher was the largest U.S. newspaper publishing company, Gannett (NYSE: GCI ) , which soared 34% after announcing a $1.5 billion deal to buy Belo. The deal demonstrates the importance of television advertising for future broadcasting growth, and will effectively double Gannett's broadcast holdings. With advertising turning toward a digital platform more and more, and Gannett positioning itself to garner significant pricing power with its growing broadcast reach, Gannett could be worth a deeper look even after today's pop.
Apparel retailer PVH (NYSE: PVH ) also jumped by double digits -- 10.2% -- after reporting significantly better-than-expected first-quarter results. Revenue figures were expected to rise dramatically with its purchase of Warnaco in February, but it was the $1.91 in EPS that stunned the Street relative to their expectation of $1.35. PVH also reaffirmed its forecast for the remainder of the year of $7 in EPS on sales of about $8.2 billion. Having brought the full line of Calvin Klein, from development to sale, all under one company, and sales of the line more than doubling year over year, PVH could also have more room to run.
Finally, traditional grocer Safeway (UNKNOWN: SWY.DL ) rallied 7.4% following the announcement that it's selling its Canadian grocery business to Empire Co., the operator of Sobeys, for about $5.7 billion. Overall, Safeway will realize around $4 billion in cash after taxes, and will be using the money to reinvest back in its business. With grocers like Whole Foods Market emphasizing natural and organic foods, and inviting customers into its stores with remodeled stores, Safeway is going to need to use its new cash pile to effectively grow and compete.
The retail space is in the midst of the biggest paradigm shift since mail order took off at the turn of last century. Only those most forward-looking and capable companies will survive, and they'll handsomely reward those investors who understand the landscape. You can read about the 3 Companies Ready to Rule Retail in The Motley Fool's special report. Uncovering these top picks is free today; just click here to read more.