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Target, Lowe's Shoot Higher on Sizzling Earnings

Target, Lowe's Shoot Higher on Sizzling Earnings

Oh, what a day for shopping! Two major U.S. retailers reported outstanding quarterly results on Wednesday, bolstering confidence in the American economy and consumers alike. Target (TGT) shares recorded their best single-day gain in history -- a 20.6% spike following Street-beating profits and revenues, as well as upgraded earnings guidance. Options such as in-store order pickups and home delivery helped drive digital sales higher. Lowe's (LOW, +10.4%) surged higher, too, thanks to better-than-expected results and same-store sales growth that surpassed rival Home Depot (HD). The Dow climbed 0.9% higher to 26,202, led by Boeing (BA, +2.5%) and Nike (NKE, +2.7%).

Strong performances by retailers should help calm fears about a looming U.S. recession. They certainly have added a little bit more fuel to the aging bull market. If the American consumer is indeed strong and spending, that could bode well for these 10 consumer stocks. Moreover, encouraging news for the U.S. economy should broadly be seen as bullish for smaller companies, which tend to generate more of their revenues domestically (unlike their larger, often multinational counterparts). Investors hoping to chase the potential growth of these tiny dynamos might consider these 10 small caps beloved by the analysts. And while smaller companies aren't known for it, they can deliver dividends too. These 20 companies certainly can be riskier than your typical blue-chip stock, but they offer a combination of income and potential upside that's difficult to ignore -- especially if the economy can still keep humming.

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