Zacks Analyst Blog Highlights: Sears Holdings, J.C. Penney, Target, The Gap and Kohl's

Business Wire, Jan 7, 2008

CHICAGO -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Sears Holdings (Nasdaq: SHLD), J.C. Penney (NYSE: JCP), Target (NYSE: TGT), The Gap (NYSE: GPS) and Kohl's (NYSE: KSS).

See the latest posts to the Analyst Blog by visiting: http://at.zacks.com/?id=2673

Here are highlights from Friday's Analyst Blog:

Low Employment Numbers

Construction jobs were down 49,000 on the month and are down 160,000 over the last five months. That is not very surprising given the difficulties that the housing market is experiencing (actually it is very surprising that it is not down much more). Manufacturing was down 31,000 for the month and 127,000 over the last five months. Given that a resurgence in exports has been one of the key strengths of the economy in recent months, the weakness there is a bit more surprising. Then again, the Institute for Supply Management came out earlier this week with a reading of 47.7, below the 50.0 reading that is the dividing line between expansion and contraction in the manufacturing part of the economy. If the resurgence in exports starts to fade, watch out below, because there is not that much else propping up this economy.

All in all, it was a pretty ugly report. The only silver lining is that it raises the probability that the Fed cuts by 50 basis points at the end of the month rather than just by 25 (while the chances of no cut or an increase is approximately the same as seeing a Ron Paul vs. Dennis Kucinich race for President this fall).

If the employment picture continues to fade, then aggregate incomes will fall. The hardest hit groups would include the retailers, particularly those that focus on discretionary items. We would be particularly concerned about firms that target the middle of the income spectrum, such as Sears Holdings (Nasdaq: SHLD), J.C. Penney (NYSE: JCP), Target (NYSE: TGT), The Gap (NYSE: GPS) and Kohl's (NYSE: KSS).

See the latest posts to the Analyst Blog by visiting http://at.zacks.com/?id=2645

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