Despite the apparent values in retail stocks, there are few reasons to get excited about the retailers. Consumer spending will remain subdued for the next few quarters, and that will lead to retailers' earnings estimates declining for the next several months.

OUTLOOK

The holidays are right around the corner. This is the most important period for retailers, as many generate about half of their annual sales during the holiday shopping season. The way things are shaping up, this may be one of the worst holiday shopping seasons in recent memory.

Economic data from this summer suggest that consumer spending may have turned negative in the third quarter, which means the consumer was in a tough spot before the credit crunch turned into a full-blown crisis. The problems in the credit markets will only exacerbate the problems negatively affecting consumer spending. As a result, earnings estimates for retailers will continue

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