By Andria Cheng

Retail stocks opened higher Thursday after first-time jobless claims in the latest week fell, a possible sign that the worst of the recession may be over. OfficeMax Inc. shares jumped after profit excluding items at the office supplies retailer exceeded Wall Street expectations.

The S&P Retail Index (RLX) rose 2.3% to 341.09 in early trading.

For the week, initial claims dropped 14,000 to 631,000. Economists believe that claims may have peaked at 674,000 in late March. Claims are considered one of the best tools for spotting turning points in the economy. Rising job losses have hurt consumers' confidence and their desire to spend.

The positive sentiment in the market was also bolstered after the Federal Reserve kept its benchmark interest rate unchanged and said Wednesday afternoon that the economic outlook had improved over the last six weeks.

OfficeMax (OMX) stock jumped 14% to $6.85. The retailer said Thursday that its first-quarter profit tumbled to $13.9 million, or 17 cents a share, from $63.3 million, or 81 cents, a year earlier. Sales declined to $1.91 billion from $2.3 billion. Excluding store-closing costs and other non-recurring items, the company said it would have earned 23 cents a share. Analysts, on average, estimated OfficeMax to earn 19 cents a share, according to FactSet.

Rival Office Depot Inc. (ODP) shares were up 3.3%. Staples Inc. (SPLS) stock was higher by 1.6%.

Costco Wholesale Corp. (COST) shares fell 0.7% to $47.32 after its stock was cut to neutral from buy at UBS.

Rite Aid Corp. (RAD) shares climbed 6.2% to 91 cents a share. The drugstore chain said Thursday that its April same-store sales rose 1.8%. Non-pharmacy comparable sales in the four weeks ended April 25 increased 3.2% while pharmacy same store sales, including an approximate 4.5 percentage point of negative impact from new generic drug introductions, increased 1.2%.

-Andria Cheng; 415-439-6400; AskNewswires@dowjones.com