Ron Johnson

JC Penney is the bright spot for retail this week

J.C. Penney delivered some encouraging news: It reported a solid rise in sales at established stores Friday, reversing four straight quarters of declines. It also posted a smaller-than-expected loss for the third quarter, all news that sent its shares soaring.

The news stanched, at least for a moment, an extended selloff in company shares, which accelerated last month when the Plano, Texas-based chain warned that it would be forced to liquidate poor-selling merchandise. Shares, which have tumbled 67 percent this year, had touched an all-time low.

Initiatives to spiff up its clothing lines to fuel sales are "giving us confidence that our overall strategy and...

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