2010 Holiday retail sales increased – how will that affect retail stocks? (TGT, BBY, MW, SHLD, WMT, JCP)

The International Council of Shopping Centers (ICSC) and Goldman Sachs released their weekly index of chain-store sales this week. The report (found here) shows that chain store sales during the week of December 25th were up 1 percent from the prior week and up 4.8 percent year-over-year. This was especially good news for the sector given that last month ICSC, the National Retail Federation and ShopperTrak all raised their expectations for retail sales gains over the holiday season because they expected this season to have the highest increase in sales seen in 5 years—and the actual results beat even those optimistic projections. So how did retail stocks respond?

Target Corporation (NYSE: TGT) fell.22 percent from $60.05 on December 27th to $59.92 (Yahoo Finance). Also slipping was Best Buy Co. (NYSE: BBY) down .41 percent from $34.22 on December 27th. While these are not large declines, it does show that investors might not have been bowled over by the positive sales data.  The Mens Wearhouse Inc (NYSE: MW) was down 1.16 percent from $24.90 on December 27th.

There was some positive action in the retail sector today. Sears Holdings Corp (NASDAQ: SHLD) was up 2.34 percent from a December 27th closing price of $68.42.  Wal Mart Stores Inc (NYSE: WMT) rose .32 percent from $53.57 to $53.74 and JC Penney Co Inc (NYSE: JCP) was up .31 percent. (Quotes – CNN Money)

Sears’ recent launch of an online video service called Alphaline Entertainment – which features downloadable movies and television shows for rental or purchase – may have contributed to the rise in SHLD stock today. For an in-depth discussion of the site and how it evolved, take a look at this post on the 24/7 Wall St. blog.

Looking for Covestor models with holdings in the retail industry? Check out: Precedent-Based, Abandon Stock, Diversified Buybacks, Breakouts and Reversals, and Rule #1.