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Two Ways To Play: Retail in Retreat


Strengthen your portfolio in good times and bad.


December was another painful month for US retailers as rising unemployment and tighter credit conditions contributed to what may have been the worst holiday shopping season in 4 decades.

Even Wal-Mart (WMT) couldn't withstand the pressure. According to Bloomberg, shares of the world's largest retailer plunged after the company reported lower-than-expected same-store sales and announced that fourth-quarter net income would miss previous forecasts. Wal-Mart finished the day down 7.49% to $51.38.

Elsewhere, Macy's (M) same-stores sales were down less than analyst expectations (-4% versus -6%), but the company announced 11 store closings and now predicts fourth-quarter earnings would come in below consensus. Shares fell by 3.36% to $10.93.

Posting better-than-expected same-store sales were Target (TGT) and Sears (SHLD). Those shares rose 1.3% and 23% respectively.

For more on the December figures, see Professor Jeff Macke's Wal-Mart, Aeropostale Lead Lackluster Retail.

From the Bull Pen: Costco (COST) is still one of the favorites. Bulls can consider this stock with a sell stop near $48.

From the Bear Cave
: See Amazon (AMZN) approaching $60 resistance. For a trade, bears can test the downside if the stock reaches that level.

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No positions in stocks mentioned.

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