Rising Consumer Confidence Lifts Retailer Stock (WMT, TGT, SHLD, AMZN)
January 26, 2010 6:15 PM
The National Retail Association and the Conference Board both had good news for retailers today as they revealed promising signs for consumer confidence.
The NRA predicted a rise of 2.5% in sales throughout 2010, buoyed by the Conference Board's consumer confidence index rising to 55.9 - a 16-month high. Economists expected a reading of 53.5, one-tenth of a point down from December's reading of 53.6.
The S&P Retail Index jumped up on this news by 1.3% to 400.63, fueled by a rise in the stock of four major retailers: Wal-Mart (NYSE: WMT), Target (NYSE: TGT), Sears (NYSE: SHLD), and Amazon (NASDAQ: AMZN). Target in particular set a 52-week high on the gain.
This is not to say that the market has recovered, though. The retail sector as a whole still has a good bit of weakness, and will have to consistently grow beyond the 2.5% predicted for the year - which is the lowest yearly increase since 1995. Consumers can be expected to remain conservative with their shopping habits, which is a boon for discount retailers like Wal-Mart, Target, and Amazon.
The International Council of Shopping Centers predicts that same-store sales will rise by 1% in January.
