There may not be an immediate connection, but retail shares followed the upward trend of the market, as investors breathed a sigh of relief over Federal Reserve Chairman Ben Bernanke's testimony on the Fed's role in

Bank of America's

(BAC) - Get Report

takeover of

Merrill Lynch

.

The S&P Retail Index gained 3.5% to 322.29, led by

Dress Barn

(DBRN)

,

Tween Brands

(TWB)

,

Bed Bath & Beyond

(BBY) - Get Report

and

J.C. Penney

(JCP) - Get Report

, the day's clear winners.

Dress Barn announced that it would

acquire Tween Brands

for $157 million in stock.

The news was a positive for both Dress Barn and Tween Brands. Dress Barn saw shares jump 9% to $14.38 in afternoon trading, while Tween Brands skyrocketed 28% to $6.63.

For Dress Barn, the tween-apparel retailer is an opportunity to diversify, while Tween Brands' debt will be paid by Dress Barn and shareholders will receive a 20% premium out of the deal.

Bed Bath & Beyond rose 10.5% to $31.35 in afternoon trading, a day after the home-furnishing retailer

posted an unexpected profit

in the first quarter.

During the quarter, the company earned $87.2 million, or 34 cents a share, up 13% from $76.8 million, or 30 cents, in the year prior, helped by cost cuts. Analysts expected earnings of 25 cents.

J.C. Penney also received a boost on Thursday after it was upgraded by an analyst at J.P. Morgan to overweight from neutral. Shares were up 6% to $28.30 in afternoon trading.

It was hard to lose today, but sneaker giant

Nike

(NKE) - Get Report

managed to do just that.

Shares tumbled 3% to $51.40 a day after the company reported a

30% decline in quarterly earnings

.

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