A sharp plunge in Shanghai Composite Index Monday sent Asian stocks sharply lower as nervous investors went on a selling spree, reflecting a growing unease that the six-month old rally has gone ahead of any economic recovery.

The Shanghai Composite Index, which had declined nearly 3% on Friday, plunged 6.7% to 2,697.  Hong Kong's Hang Seng retreated 1.9%. In Japan, the Nikkei 225 stock average, which was up 200 points earlier in the session, fell 41.61 points, or 0.4%, to 10,492.53.  In Yesterday’s landslide victory, the Democratic Party of Japan came to power ending an almost half-a-century rule by the Liberal Democratic Party.  The yen strengthened, helped by the election results.

This morning’s U.S. stock futures show Wall Street is headed for a lower opening.  Dow Jones industrial average futures fell 59, or 0.6%, to 9,477. Standard & Poor's 500 index futures fell 5.70, or 0.6%, to 1,021.70, while

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So what has stocks soaring now, during this great deleveraging — this credit crunch — this historic pullback in household balance sheets?

Consumer confidence, of course.

We recently vowed to stop calling our national brethren “consumers” in favor of less degrading words — like Americans, citizens or just plain-old people. Thus, we report the Conference Board printed a surprisingly optimistic gauge of American consumption attitudes (doesn’t that sound better?) yesterday. After two months of decline, the index kicked back up to 54.1, just shy of a 2009 high.

Coupled with the latest printing of the home price index, that was enough to keep this mega-bounce alive and kicking. The news shot the S&P 500 to a 1% gain within moments of yesterday’s opening bell, which eventually faded into a 0.25% advance. The index is up almost 4% in the last five trading days. The Dow hasn’t fallen for six days in a row.

We

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According to the International Council of Shopping Centers (ICSC), US chain store sales for May fell by 4.6%. The ICSC had expected May sales to be drop 3%. Additionally, the 25 retailers that we track experienced a sales drop of 4.8%, and roughly two out of three retailers missed sales estimates for the month of May.The year-over-year decline in sales was due in large part to difficult comparisons. At this time last year, Uncle Sam was sending out $600 tax rebate checks to consumers, who used a portion of those funds to go shopping. Of course, rising unemployment, lower wages and a penchant for saving over spending might have had something to do with the weak sales.                                        During May, the winners were specialty retailers Aeropostale (ARO), up 19%, and Buckle (BKE), up 13.4%. Retailers that disappointed were Abercrombie (ANF), down 28%, and ...

For Immediate Release

Chicago, IL - June 3, 2009 - 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: Avalon Bay (AVB), Boston Properties (BXP), Carter's (CRI), O'Reilly (ORLY) and 99 Cents Only (NDN).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=4579.

Here are highlights from Tuesday's Analyst Blog:

REITs Continue Their Run

Equity REITs are now trading closer to the value of their assets. Although as a group, REITs are still trading below net asset value. Although, underlying fundamentals cannot be ignored. 1Q results among companies we cover were generally unspectacular and operations are deteriorating in all major property types:

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Most retailers have reported first quarter results. Investor expectations were at extreme lows coming into 2009, and retailers were able to beat those low expectations. This enabled retail stocks to outperform the broader market. The upside on the bottom line was due primarily to cost cuts. Gross margins were still unimpressive. For most of the industry, sales were down significantly year-over-year. But, the decline in sales was at a slower rate than in the second half of 2008. Retailers that actually increased sales were Carter's (CRI), which sells baby apparel; O'Reilly (ORLY), which sells auto parts; and 99 Cents Only (NDN), which is a discount store. The retail stocks that outperformed within the group were the lowest priced stocks with the worst-looking balance sheets. The laggards were the defensive retailers like supermarkets and wholesale clubs and those with the best balance sheets. The stock ...

We all know consumption is the most prominent victim of this recession.  Not only do we have to deal with soaring unemployment and tightening credit, but also the behavioral shift in America of spending less as a percentage of income.  Obviously these factors are going to disproportionately hurt the sub sectors with the highest priced goods, or those considered the most discretionary such as luxury cars, high-end women’s clothing, etc.  One sub-sector that will surely feel tremendous pain, however, is teen retail.

It is common knowledge the national unemployment rate is expected to reach 10% or higher in the foreseeable future.  This is well known, and priced in to most retail stocks.  When you break unemployment down by age, however, a very grim signal for teenage spending in particular emerges.  According to the U.S. Bureau of Labor Statistics, the current unemployment rate for men and women between the ages of

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Highlights include JC Penney Co., Inc. (JCP), Macy's, Inc. (M), Cost Plus, Inc. (CPWM), Wal-Mart Stores, Inc. (WMT) and Costco Wholesale Corp. (COST).This morning the U.S. Census Bureau announced that April retail sales declined 0.4% vs. expectations of 0.0%; retail sales (ex-auto) declined 0.5% vs. expectations of +0.2%. March retail sales were revised lower.Department stores, electronics, food/beverages, furniture, and online all experienced sales declines in April. Restaurants, sporting goods, health/personal care, and building materials all saw gains in April. On a year-over-year basis, retail sales fell 11.4% in April. The market was clearly disappointed by this news.This was the second straight monthly drop in retail sales, and the eighth decline in the last ten months. Recall that retail sales increased in January and February, and the equity market gravitated to the idea that consumer spending bottomed out in the ...

Highlights include Wal-Mart Stores, Inc. (WMT), Abercrombie & Fitch Co. (ANF), Aeropostale, Inc. (ARO), Macy's, Inc. (M), down 9% vs. down 8% and Hot Topic, Inc. (HOTT).April retail sales were better than expected, with about 60% of retailers beating forecasts. That is an improvement from March, when about half of the retailers beat forecasts.Our sample of 20 retailers reported that April sales increased 1.7%, including Wal-Mart (WMT), but decreased 2.6% excluding Wal-Mart. Among those retailers beating forecasts were Wal-Mart, up 4% vs. expectations of up 3%, Abercrombie (ANF), down 22% vs. down 28%, and Aeropostale (ARO), up 20% vs. up 9%. Those retailers that fell short were Macy's (M), down 9% vs. down 8% and Hot Topic (HOTT), up 3% vs. up 7%.Retail sales have stabilized from the awful 2008 holiday season, but overall ...

div style="text-align: justify;"Merrill Lynch/BAM is out with span style="font-weight: bold;"cautious comments on Apparel players /spansaying following easy sales and weather comparisons in March, underlying momentum may still be weak (adjusting for the Easter shift) as retailers continue to face traffic and ticket pressures.br /br /Firm also notes relative outperformance of retail stocks (vs. SP500) usually ends in May as Retail stocks typically outperform the SP500 starting in Jan / Feb, peaking in Mar, and then underperform in May/Jun until Aug/Sep. Branded Apparel stocks typically start to underperform the SP500 in Jun and July.br /br /They are downgrading span style="font-weight: bold;"Ralph Lauren (NYSE:RL)/span to Underperform from Neutral (with a $42 tgt) noting that after benefiting from the upward mobility in customer spending patterns (as key dep’t stores customers focused on up-scaling merchandise assortments through ‘06-’07), dep’t stores shift away from a higher AUR strategy and emphasis onsharper price points, coupled with ...

Retailers have been one of the best performing groups in 2009. The S&P Retail Index [RLX] is up 19% year-to-date (through April 27). That is well above the S&P 500, which is down 5%.

It appears that investors believe that retailers bottomed out in the fourth quarter of 2008 and expect results to rebound in sometime in the second half of 2009. In our view, this enthusiasm for retail stocks is misplaced. While there have been some signs that conditions have stabilized from the freefall in the fourth quarter of 2008, there havenÕt been any real signs of improvement for retailers.

The reality is that consumer spending will not rebound any time soon. We would continue to remain cautious with retail stocks.

ThatÕs because consumer attitudes toward debt and spending have changed. Wealth destruction and reduced access to the credit markets have forced consumers to reduce discretionary spending, increase savings, and pay

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