NEW YORK (CNN/Money) - The Fed left interest rates unchanged, with the core Fed funds rate staying at 1 percent. Despite those small signs of hope that the economy is improving -- or are they better characterized as wishful thinking? -- the Fed still says that the bigger risks are on the downside.

Their main concern is the chance of "undesirably low" inflation -- in other words, rates will stay low. But the news made the stock market happy. After the Fed announcement, the Dow began to climb, finally closing up 92.71 at 9,310.06 -- not far from its 52-week high. The Nasdaq added 25.50 to 1,687.01.

STOCK STUFF Retailers including JC Penney, May and TJX posted mixed earnings news. JC Penney, which recently lowered expectations, earned the originally anticipated amount, thereby enabling it to beat expectations. Make sense?

May earned less than last year but still beat expectations. Would you rather have the former or the latter? And discounter TJX saw its earnings decline. Why? The weather, of course. Despite optimism about back-to-school sales (spend those child tax credits!), the stocks turned in a moderate performance.

Oh, and superstar Abercrombie & Fitch posted a mixed performance, with earnings rising 13 percent but comparable store sales falling 8 percent.

It's a hit! Marvel soared $2.85 to $21.50 after announcing that second quarter profits soared more than six-fold and that earnings for the year would be above expectations thanks partly to the successful licensing of the "Incredible Hulk" and "Spiderman." In the last year, Marvel has more than quadrupled. Just be careful: Hit-driven businesses can be harmful to your financial health.

After the close, Applied Materials reported its much-anticipated earnings. Net sales slid 25 percent from a year ago. Earnings plummeted too -- even before a giant $164 million pretax "realignment" charge. But hey, the results beat expectations by a penny! And the company talked about "positive indicators."

DR. JEKYLL AND MR. HYDE That's JC Penney's two divisions -- Eckerd and JC Penney. While the department stores/catalog seem to be delivering on a turnaround plan, business at Eckerd simply stinks. Comparable store sales slipped by 0.8 percent -- with non-pharmacy sales falling 6 percent -- while operating profits fell a stunning 26 percent year-over-year. (Operating profit in the department stores and catalog division shot up to $51 million from just $22 million a year ago.)

CEO Allan Questrom, who called Eckerd's results "clearly disappointing" didn't voice great hopes for the future -- he expects profits to still be below last year's in the third quarter. Overall, JC Penney reported a loss of two cents a share (see above). Given that Eckerd is still bigger than the rest of JC Penney (on an operating profit basis), is it safe to talk turnaround yet? JC Penney, which is down from around $25 early this year, slipped 31 cents to 17.76.

AMG Data says that investors yanked $1 billion from bond funds in July, the first monthly outflow since December 2000. At the same time, investors put $17.4 billion into stock funds...

Is the bull coming back? Merrill Lynch raised its earnings estimates for a number of investment banks. "An admittedly unscientific survey of 'Town Car' usage in lower Manhattan reveals a solid cyclical uptick over the past several months, with July believed to be the strongest month YTD," writes Merrill...

There's still money out there. Dynegy jumped 20 cents -- 6.7 percent -- to 3.17 after announcing last night that it had closed over $1.5 billion in refinancing transactions. What do you think: Is this delaying the inevitable, or is there truly hope?....

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