U.S. stocks rallied, sending the Dow Jones Industrial Average to a record, after retailers reported better-than-expected sales and investors speculated Alcoa Inc. may be bought.

Wal-Mart Stores Inc., the world’s largest retailer, posted its biggest gain in a month after same-store sales tripled analysts’ predictions. Aluminum producer Alcoa led the Dow’s steepest advance in almost a year as Rio Tinto Group’s plan to buy Alcan Inc. spurred expectations of more takeovers in the metals industry.

June sales at Wal-Mart, J.C. Penney Co. and Costco Wholesale Corp. eased concern that the housing slump and surging energy prices would cripple consumer spending, which accounts for more than two-thirds of the U.S. economy. (Bloomberg)