Call it the Depression trade. The pockets of strength in retail stocks steadily empty, until even Family Dollar Stores and Dollar Tree Inc. are considered overvalued.
Retailers “continue to underperform, and if the market’s vulnerable (they) will possibly still lead on the down side,” said Steven Goldman, market strategist at Weeden & Co. “It may continue to lag (even) on rebounds until there’s an anticipation of a bottom in housing prices. With the dire straits of unemployment (and) savings increasing, spending is still not there.”
Now, traders are exhibiting fears that shoppers will balk at prices in Family Dollar, which cut its gains to 2% for the year-to-date after rival Dollar Tree reported fourth-quarter sales below analysts’ estimates.
The Consumer Discretionary Select Sector SPDR is down 12% at $19.09 for 2009 and is likely to wallow around these levels for some time, said Mr. Wilson.
No comments:
Post a Comment