Market Overview

Retail Sector Recovers Slightly After Tripping

After falling in the first half of the trading day, retail stocks have moved slightly in the black today. The S&P Retail Index has advanced 0.58% to 407.72 after the Commerce Department estimated a substantial increase in the savings rate of US households in May, with income growing faster than spending.

The sector moved into the red in the early morning after both FBR Capital Markets and Credit Suisse slashed their profit estimates for home-improvement retailers Lowe's Cos (NYSE: LOW) and Home Depot Inc (NYSE: HD).

While cutting his 2010 and 2011 profit outlook for HD and LOW, FBR analyst Stephen Chick said in his research note, “Management commentary on recent webcasts reflected a slight downshift in tone, in our view, and this is what recent investor sentiment has been concerned about.” Similarly, analyst Gary Balter of Credit Suisse cited "recent housing data points to their recoveries being pushed out into 2011” as the reasons for lowering his 2010 profit estimates for both stocks.

Both the analysts said that the outlook for the home goods related sector looks bleak after the recently-announced disappointing data on the sales of new and existing homes for the month of May.

Abercrombie & Fitch Co (NYSE: ANF) also lost 0.46% to $32.23, despite receiving an upgrade in rating by Brean Murray Carret & Co from “sell” to “hold.” Another stock that has slipped despite positive news is Finish Line (NASDAQ: FINL). FINL is down 2.03% after gaining as much as 3% after an upgrade by Susquehanna Financial Group to “positive” from “neutral.”

The company that is in the positive territory today is Destination Maternity Corp (NASDAQ: DEST), which is up 0.58%. The company announced today that it will raise its leased departments at Macy's from 113 to more than 615 by the end of February, 2011.

Read more from Benzinga's Markets.

Posted-In: Credit Suisse FBR Gary BalterNews Intraday Update Markets Movers Trading Ideas

 

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