The better-than-expected results come at a time when traders are worried about a possible U.S. economic slowdown. Those fears have led investors away from riskier assets like equities in favor of traditionally safer assets like gold and Treasurys.
Target shares surged more than 16% to a record. Lowe's jumped around 10%.
The Dow Jones Industrial Average traded 300 points higher, or 1.2%. The S&P 500 gained 0.9% while the Nasdaq Composite jumped 1.1%.
"A very mild recession could begin in 2020 but the stock market data don't support that just yet. That could change in the next rally, but it doesn't support it right now," said Paul Schatz, president at Heritage Capital.
But Bank of America CEO Brian Moynihan thinks the U.S. consumer is strong enough to keep the economy growing.
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