Retail Winners & Losers: Oil Powers Stocks

NEW YORK (TheStreet) -- Retail is feeling the energy.

Shares in the sector rallied in afternoon trading, led by a surge in energy stocks amid signs that demand for oil may be rising and, with it, the prospects for economic recovery.

The S&P Retail Index was up 0.5% to 356.32, with AnnTaylor Stores(ANN Quote), BJ's Wholesale(BJ Quote), Ross Stores(ROST Quote) and Guess(GES Quote) among the day's most notable climbers.

AnnTaylor's stock price grew by 6.5% to $12.42 after the shares were upgraded to buy by UBS analyst Roxanne Meyer. She noted that AnnTaylor's Loft division is a catalyst for the recovery of the company, which has seen sales slide amid the recession.

BJ's was up 2% to $31.95 on better-than-expected second-quarter earnings. The wholesaler reported a 4% dip in profit due to lower gasoline prices and food deflation, but results topped Wall Street's expectations, and the company upped its full-year outlook.

Shares of off-price Ross Stores jumped 2% to $44.58 in afternoon trading, a day before it was due to release second-quarter results. Analysts expect the company to report solid numbers since the off-price sector remains a favorite with consumers looking for bargains.

If it's any indication, rival TJX(TJX Quote) reported on Tuesday that both profit and sales climbed in its second quarter.

Guess shares received a boost after Margaret Whitfield, analyst at Sterne Agee & Leech, said the company's fall merchandise is trend-right (industry jargon for "fashionable") and selling well. She reiterated her buy rating, and shares of the company rose 3% to $29.

Several retailers, however, didn't receive the same jolt of energy.

Department-store stocks were down as investors awaited quarterly results from Sears(SHLD Quote).