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Retailers mixed on preliminary February retail sales outlooks

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The S&P Retail Index (RLX.X) 247.20 (unch) shows little change as we approach the end of the today's trade after slipping to a 52- week low this morning that just barely violated a previous 52- week low of 244.92 set on October 10, 2002.

Discount retailer and Dow components Wal-Mart (NYSE:WMT) $46.80 +0.02% said it sees modest same-store sales growth of 2% to 4%, while Federated Department Stores (NYSE:FD) $23.87 -0.16%, which traded a 52-week low this morning said it expects February same- store sales to fall 4% to 5%, March comparable to decline 3-4%, and expects April comparables to be flat to up 1%.

Shares of J.C. Penney (NYSE:JCP) $18.38 -1.34% are hovering near its session low of $18.20 after saying that last week's sales for its department stores were better than it had projected, but that it sees February same-store sales as flat compared with last year, when it posted a 12.5% increase in sales.

An early look from these broadline retailers at both the discount and mid-tier pricing levels gives a rather "mixed" to "lower" look as to what the consumer has been doing in the past couple of weeks and perhaps shows somewhat of a "picky" or cautious rate of consumer spending at the retail level.

While the more "brick and mortar" retailers like those listed above show relatively unchanged to lower stock action, E-tailers like Amazon.com (NASDAQ:AMZN) $21.31 -0.6% and e-Bay (NASDAQ:EBAY) $73.60 +1.71% show similar trade, only from much stronger technicals from the past several months.

Amaozon.com (AMZN) said it would stop spending on TV ads and use that money to lower prices and offer free shipping for orders over $25. AMZN spent $50 million in TV ads aired in major urban markets just before the Christmas holiday last year.

A slight firming in the U.S. Dollar Index (dx00y) $100.23 +0.66% and back above the $100 level has the Gold/Silver Index (XAU.X) 72.27 -3.05% at session lows and has broken below what looks to be the neckline of a head/shoulders top on its bar chart. These technicals come after our mentioning last week that the Precious Metals Bullish % (BPPREC) from Dorsey/Wright and Associates was at 76% bullish and might be vulnerable to some profit taking in coming sessions. "Gold bugs" now begin to monitor the XAU.X for support at the trending higher 200-day SMA of 71.84. From there, next support would be the lower end of the Bollinger band we looked at last week near 67.00.

When I started writing this update, the major indexes had pulled back near unchanged levels, but into the close now look to be trying to test their early-afternoon highs, which were set after Iraq said it would allow U-S surveillance planes back over all airspaces.

Jeff Bailey

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