The number of Americans applying for unemployment benefits slipped by 3,000 last week to 266,000 from the week earlier, continuing a trend of being below the 300,000 mark for the 75th consecutive week.

The data follows a set of robust labor market reports including last week's monthly payrolls numbers.

Kohl's (KSS.N) kicked off the two-day earnings run of department store chains. The company's shares rose 13.4 percent after its quarterly profit beat estimates.

Macy's (M.N) shares soared 16 percent after the department store operator reported a smaller-than-expected drop in quarterly comparable store sales and said it would close 100 stores.

The rally in Macy's helped the S&P 500's consumer discretionary index .SPLRCD jump 0.8 percent, making it the biggest gainer among the benchmark's 10 major indexes.

Nordstrom (JWN.N) rose 8.9 percent in the run-up to the results after market closes, while J.C. Penney (JCP.N), which reports on Friday, was up 5 percent.

Macy's was the top percentage gainer on the S&P 500, followed by Kohl's and Nordstrom.

Alibaba (BABA.N) rose 5.4 percent after the Chinese e-commerce giant posted a 59 percent jump in quarterly revenue. Yahoo (YHOO.O), which owns a stake in Alibaba, rose 3.4 percent.

Better-than-expected second-quarter earnings and a set of strong economic data have pushed the S&P 500 to a series of record intraday highs since July.

At 9:37 a.m. ET (1337 GMT), the Dow Jones Industrial Average .DJI was up 78.11 points, or 0.42 percent, at 18,573.77.

The S&P 500 .SPX was up 8.07 points, or 0.37 percent, at 2,183.56. The index is just 4 points shy of its record high.

The Nasdaq Composite .IXIC was up 26.41 points, or 0.51 percent, at 5,230.99.

"It's certainly hard to fight the recent trend, which has been a better appetite for risk and I don't see anything to upset things," said Mark Heppenstall, CIO of Penn Mutual Asset Management. "It seems stocks are a better long-term investment at this point."

Oil prices reversed course, albeit in choppy trading, after the International Energy Agency forecast crude markets would rebalance in the next few months. [O/R]

Valeant (VRX.N) fell 7 percent after the Wall Street Journal reported that U.S. federal prosecutors had opened a criminal investigation on the drugmaker.

Advancing issues outnumbered decliners on the NYSE by 1,936 to 720. On the Nasdaq, 1,568 issues rose and 644 fell.

The S&P 500 index showed 22 new 52-week highs and no new lows, while the Nasdaq recorded 40 new highs and eight new lows.

(Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Don Sebastian)

Source: http://www.reuters.com/article/us-usa-stocks-idUSKCN10M14R