By Andria Cheng
Retail stocks headed higher in early trading Monday, with
gainers including Best Buy Co., after the largest U.S. electronics
retailer was upgraded to outperform by William Blair & Co.
Best Buy (BBY) shares rose 1.1%. The largest U.S. electronics
retailer could reap a seven-percentage-point benefit in domestic
comparable-store sales this year from the exit of Circuit City
(CCTYQ), which shut its stores on Sunday, analyst Jack Murphy said
in his upgrade note. He said the company's efforts to cut operating
expenses and capital spending will also help it offset weak
consumer demand.
The S&P Retail Index (RLX) rose 0.7% to 230.42. Trading in
the sector has been volatile amid investor concerns about the
global economic outlook.
Avon Products Inc. (AVP) was cut to underperform from market
perform by BMO Capital Markets on Monday. Analyst Connie Maneaty
said she's concerned about the beauty company's "outsized exposure"
to central and eastern Europe, where the financial crisis has
worsened.
The dollar's strength in regions such as Latin America also will
dent sales there after they are translated back to the U.S.
currency. She cut her price target on the stock to $10 from $24.
Avon shares fell 5.7% to $14.79.
AnnTaylor Stores Corp. (ANN) shares tumbled 14%, the second
straight sharp decline after the company on Friday posted a
bigger-than-expected loss and said it's not giving any profit
forecast for the first quarter and for the full year.
Its stock plunged 38% Friday.
Staples Inc. (SPLS) shares were little changed. Collective
Brands Inc. (PSS) shares were up 5%. Both are expected to report
their quarterly results this week.
-Andria Cheng; 415-439-6400; AskNewswires@dowjones.com