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Why Major Retailers' Stocks Fell In The Bargain Bin

By: Investor's Business Daily
Posted: 11/26/2012 4:53:00 PM
Referenced Stocks: BIG;COH;JWN;M;TGT

Investors tossed major brick-and-mortar retailers into the bargain bin on Cyber Monday -- a day celebrated by online retailers as consumers shop till they drop over the Internet.

Nordstrom ( JWN ),Macy's ( M ),Big Lots ( BIG ) andCoach ( COH ) dragged the S&P 500 down the most, falling 3.00% to 4.12%.Target ( TGT ),Bed Bath & Beyond (BBBY) andCostco (COST) skidded 1.70% to 2.64%. They contributed the most to the 0.21% loss in SPDR S&P 500 (SPY).

These chains are essentially becoming show rooms (AMZN) (EBAY), says Ethan Anderson, chief investment strategist at C-PAS, an investment advisory firm in Grand Rapids, Mich. He believes investors may be assuming that good sales and earnings for and may translate into bad numbers for traditional retailers.

Amazon climbed 1.56%. EBay blasted 4.88% and broke out of a flat base chart pattern.

SPDR S&P Retail (XRT), a basket of the all the retailers in the S&P 500, fell 0.97%.Market Vectors Retail ETF (RTH) slipped 0.47%.

SPDR Dow Jones Industrial Average (DIA) dropped 0.28%.

PowerShares QQQ (QQQ) bucked the sell-off with a 0.43% gain thanks to strength inApple (AAPL) (AMZN).

Online sales growth has been beating brick-and-mortar stores by a wide swath the past few years. IHS Global Insight projects online holiday retail sales will rise 17% over last year. They climbed 16% year over year in 2011 and 14% in 2010.

Retail sales overall are seen rising 3.9% over last year, after lifting 5.5% the previous two years.

"One reason that several brick-and-mortar stores opened their doors on Thanksgiving Day was that online stores are open 24/7," U.S. economist Chris Christopher of IHS wrote in a note. "Last year's holiday online retail sales amounted to a little over $67 billion and this year's holiday online retail sales are projected to be in the $79 billion ballpark."

Christopher notes that consumer confidence has been improving since the end of summer, with gas prices falling, wage increases seen as likely to outpace inflation and the housing market recovering.

Follow Trang Ho on Twitter @TrangHoETFs .