Consumers Fuel S&P

The S&P Retail Index added 0.9% while retailers of all stripes gained ground. Name-brand apparel companies like Guess(GEX Quote), Abercrombie & Fitch(ANF Quote) and J.Crew(JCG Quote) added 2.9%, 1% and 6.5%, respectively.

Target(TGT Quote) added 2.2%, Wal-Mart(WMT Quote) another 1%, while electronics retailers Best Buy(BBY Quote) and Circuit City(CC Quote) each gained more than 2% on the day. Circuit City announced Thursday that it has cut 200 job cuts as part of its restructuring plan.

Personal spending is "the main variable to watch in the weeks ahead," writes Tony Crescenzi, chief fixed-income strategist at Miller Tabak, and a RealMoney.com contributor.

The rest of the day's news also helped push stocks higher as optimism prevails about the looming torrent of economic data coming out Friday morning, including payrolls.

Most analysts expect to see a gain of 130,000 new jobs added in May, though the estimates may be slightly low. Signals like six declining weeks of jobless claims out of seven, a jump in the employment index in Thursday's Chicago PMI report, and some forecasting challenges point to a payrolls report at least in line with expectations.

Economists erred on the side of caution with payroll forecasts this month because they have less current data to draw on. The Institute for Supply Management's manufacturing and service sector reports come out Friday and Monday, respectively.

"This makes forecasting more hazardous than usual," says Joe Brusuelas, chief economist at IDEAglobal.