NEW YORK (TheStreet) -- Wall Street witnessed the silver lining of sliding gasoline prices on Thursday as an unexpected jump in November consumer spending boosted retail stocks. Benchmark indices made a good show of partially recouping punishing losses suffered over Wednesday's session, though still have a way to go to end the week in positive territory.

Some of the day's initial gusto in which the S&P 500 surged 1.5% was exhausted after crude oil slipped below the psychological $60-a-barrel level. The S&P 500 closed 0.45% higher, the Dow Jones Industrial Average added 0.37% and the Nasdaq popped 0.52%.

Energy stocks retreated from earlier highs as West Texas Intermediate closed below $60 for the first time since July 2009. The day's decline was on top of a 5% dive on Wednesday after OPEC cut demand forecasts for 2015.

The Energy Select Sector SPDR ETF (XLE) - Get Energy Select Sector SPDR Fund Report slipped 0.07%, paring gains of over 2% earlier in the session. Mid-cap oil explorers and drillers were among the hardest hit with Transocean (RIG) - Get Transocean Ltd. Report down 2.1% and Nabors Industries (NBR) - Get Nabors Industries Ltd. Report falling 3.1%.

"Any time there's a big crisis there's a lot of throwing the baby out with the bathwater," Patty Edwards, managing director for investments at U.S. Bank, said of the energy selloff. "Until we have a little bit more sense of stability, the whole idea is to never try to catch a falling knife because you end up getting cut."

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The shining star of the day was retail stocks. The SPDR S&P Retail ETF (XRT) - Get SPDR S&P Retail ETF Report rose 1.3%, while industry giants Walmart (WMT) - Get Walmart Inc. Report , Target (TGT) - Get Target Corporation Report and Costco (COST) - Get Costco Wholesale Corporation Report all gained. Staples (SPLS) was the best performer on the S&P 500 after activist investor Starboard Value increased its stake in the office supplies chain and competitor Office Depot (ODP) - Get ODP CORPORATION Report , a move which could put pressure on the companies to merger, TheWall Street Journal reported.

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Overall retail sales climbed 0.7% in November, its largest gain since March, compared to forecasts for a 0.4% increase. Core retail sales, excluding automobiles, gasoline and food services, rose 0.6%.

Increased consumer spending in November validated what economists assured traders would happen since a crash in crude oil sparked broad market selloffs: lower gasoline prices would fuel consumer confidence to spend, a more important measure of economic health given consumer spending contributes more than two-thirds of GDP. The National Retail Federation reaffirmed its 4.1% growth forecast for the holiday season.

"This is the first tangible sign that lower oil prices are supporting the consumer," said Anthony Valeri, investment strategist for LPL Financial, in a call. "The U.S. consumer obviously got the holiday shopping season off to a strong start... From our calculations consumer spending has begun the fourth quarter at the same pace as the third quarter so it's consistent with GDP growth of around 3%."

Walgreen (WAG) shares advanced 7.1% after CEO Greg Wasson announced his retirement, effective once the company's merger with Alliance Boots is completed. Urban Outfitters (URBN) - Get Urban Outfitters, Inc. Report climbed 7.7% following a Securities and Exchange Commission filing in which the retailer disclosed fourth-quarter comparable sales in the low-single digits after a negative result in its third quarter.

Lululemon (LULU) - Get Lululemon Athletica Inc (LULU) Report added 9.2% after beating third-quarter earnings estimates, though gains were restricted as operating margins were pressured.

Delta Air Lines (DAL) - Get Delta Air Lines, Inc. Report climbed 4.6% after the airline said it expects pretax income to increase to $5 billion next year as a result of the drop in oil prices. Airlines extended Wednesday's rally with UnitedContinental (UAL) - Get United Airlines Holdings, Inc. Report , SouthwestAirlines (LUV) - Get Southwest Airlines Co. Report and AmericanAirlines (AAL) - Get American Airlines Group, Inc. Report each higher.

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-- Written by Keris Alison Lahiff in New York.