On Thursday, the Dow Jones Industrial Average (DJINDICES:^DJI) burst through the 24,000 level for the first time to finish at 24,272. The S&P 500 (SNPINDEX:^GSPC) also closed at a record.

Today's stock market

Index Percentage Change Point Change
Dow 1.39% 331.67
S&P 500 0.82% 21.51

Data source: Yahoo! Finance.

Industrials and transportation companies would be among those with the most to gain from corporate tax cuts, and they led the market as the odds of a tax bill passing seemed to improve. The Industrial Select SPDR ETF (NYSEMKT:XLI) rose 1.7% and the iShares Transportation Average ETF (NYSEMKT:IYT) added 2%.

It turns out that investors were a little quick to write off a number of retailers in the face of competition from a certain e-commerce titan. Two saw large positive moves after releasing earnings today: Kroger (NYSE:KR) and The Michaels Companies (NASDAQ:MIK).

Graph of rising stock price.

Image source: Getty Images.

Kroger bags a strong quarter

Grocery chain Kroger reported third-quarter results that beat expectations and provided an upbeat view on the holiday season, and shares jumped 6.1%. Sales grew 4.5% to $27.7 billion and the company earned $0.44 per share, up from $0.41 per share in the same period last year. The consensus of Wall Street analysts was for EPS of $0.40 on sales of $27.5 billion. 

Same-store sales growth, excluding fuel, was 1.1%. Kroger had said last quarter that the metric would come in between 0.5% and 1% for the remainder of the year. Including fuel, same-store sales growth was 2.4%. Gross margin --  excluding fuel, the specialty pharmacy the company acquired last year, and an accounting change -- increased 30 basis points to 22.4%, indicating that the company was able to achieve the sales gain without lowering prices more than costs fell.

The company painted a positive picture going forward as well. "The holidays are always Kroger's time to shine. In fact, we had our best ever Black Friday results for general merchandise, led by record sales at Fred Meyer," said Chairman and CEO Rodney McMullen in the press release. "This quarter shows that by investing for the future, our business continues to improve and gain momentum."

The current formula for retailers getting love in this market is to beat expectations and to spread some cheer about holiday sales, and Kroger certainly did that today.

Michaels crafts higher profits

Shares of Michaels, North America's largest specialty provider of arts and crafts supplies, soared 11.6% after the company reported third-quarter results. Sales increased 1.1% to $1.24 billion and adjusted earnings came in at $0.44, up 10% from the period a year earlier. The sales number was slightly below the analyst consensus, but EPS beat by a penny.

Comparable-store sales increased 1% (1.8% excluding the effect of hurricanes), and online sales doubled from last year. Gross profit margin increased a full percentage point, but part of the gain was a result of a one-time accounting event last year. For the nine months so far this year, gross margin has improved from 38.4% to 39%. The company bought back 2.4 million shares of its stock during the quarter. Over the past 12 months, Michael's buyback program has shrunk the number of shares outstanding by 11%.

Although its sales growth was not spectacular, Michael's seems to be holding its own against competition and achieving strong returns in the process, and that was enough to propel the shares higher today.

Jim Crumly owns shares of The Michaels Companies. The Motley Fool recommends The Michaels Companies. The Motley Fool has a disclosure policy.