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S&P upgrades ratings on Gap

NEW YORK (AP) -- Standard & Poor's Ratings Services on Friday raised its ratings on Gap Inc., saying it expects the retailer can sustain its recent growth trends.

The rating agency raised the retailer's corporate credit rating one notch "BBB-" from "BB+", moving it into investment-grade territory. The outlook is stable.

S&P said that Gap has demonstrated consistent positive operating performance in recent quarters, with meaningfully increased margins and positive sales gains from stores open at least a year.

The company reported that sales in stores open at least a year increased 5 percent in 2012. That is a key indicator of performance because it excludes recently opened and closed stores

Gap, based in San Francisco, owns its namesake brand, as well as Old Navy, Banana Republic, Athleta and Piperlime.

Gap shares rose $2.18, or 5.6 percent, to close at $40.99. Earlier in the session shares were as high as $41.43, a new 52-week high.