Target (TGT  ) announced that it would be raising its earnings guidance for the second quarter on Thursday which sent the stock up immediately. While this type of announcement is normal for stocks, its been a rare event in the retail sector. The news helped move other retail companies higher on the day as well which caused the media, and the street to wonder if the retail pain is coming to an end.

Shares of Target traded as high as 5.6% on Thursday following the announcement, and were able to close higher by 4.8% on the day. Gap (GPS  ) was also able to benefit from the news as well, gaining 5.61% on the day. In fact, many names in the space did quite well on the day. Macy's, Inc. (M  ), Urban Outfitters, Inc., and Kohl's Corp. (KSS  ) all added over 4%. The support from Target also pushed retail ETF's (XRT  ) higher as well. The XRT had a gain of 2.31%.

So what did Target say that was so good? Well the company said it expects its second quarter comparable sales, and earnings per share to come in above the range of $0.95 - $1.15 that they previously projected. The CEO, Brian Cornell commented that "broad-based improvement in traffic" was one of the reasons for the boost.

The issue here is that retail stocks have been hit hard as a whole and Target is the first glimmer of hope in the space. The other thing to consider is a short covering rally. Those that are short the retail sector won't likely panic and cover their positions based on one announcement, but if other retail companies follow up on this news with good announcements themselves many analysts predict some rotation back into the space. For now its just one good announcement from a retail stock. Time will tell where we go from here.