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So many retailers posted comparable-store declines and the weakness was so broad-based that investors appeared to buy retail stocks on the theory that tighter inventories, tax rebate checks and upcoming easier comparisons could make the next few months look stronger.
The S&P Retail Index shot up 1.8 percent to 395.39 Thursday, as the broader S&P 500 rose a milder 0.45 percent to 1,360.55.
Wal-Mart Stores Inc. won the retail derby, not only posting a 0.9 percent rise in comparable-store sales for the month at its namesake division, but upping its first-quarter earnings guidance to boot.
There was little good news elsewhere, besides the strong performance among warehouse clubs and drugstores.
Frigid temperatures and an early Easter made for tough comparisons with March 2007. The calendar shift could not be wholly to blame, though, as shoppers are also holding back in the face of mounting job losses, a looming recession and turmoil in the credit and financial markets.
Comps overall fell 0.5 percent last month, the worst March showing since 1995, according to the International Council of Shopping Centers.
"There's just a general weakness in all categories and women's is the worse," said Deborah Weinswig, broadlines analyst at Citigroup Global Markets Inc. "It's the first time I've heard a lot of the retailers use the R-word."
Whether or not the economy has technically entered a recession is really a technicality for stores cutting back on inventories to avoid markdowns. But there might be a hint of a silver lining.
"This really is as bad as it gets for two quarters," said Weinswig.
April will benefit from an extra selling day thanks to the Easter shift and hopefully warmer temperatures. In addition, in May the government will begin mailing out $600 tax rebate checks and although their potential impact is being debated, the rebates can't hurt.
Dana Telsey, chief executive officer and chief research officer of Telsey Advisory Group, expects consumers will save 25 to 30 percent of their checks and spend the rest.
"Will they spend the rest fixing the deck or buying apparel? That's the question," she said.