Seven To Ten

Some retailers have blamed an early Easter and cooler weather for decreasing store sales in March. These two factors, combined with sluggishness in consumer spending, exacerbated the damage.

It is a perfect storm of factors: Gas and food prices are at an all-time high, the housing market is deteriorating, the credit market is tighter and consecutive months of job losses. However, retailers are looking forward to April sales. Last April, sales fell 1.8%. So the comparisons are easier. Also, seasonal purchases should get a boost as the weather improves.

Sales tracker Thomson Financial has reported that many retailers have missed analysts’ estimates than beating forecasts. The disappointments were more pronounced for firms like Limited Brands, owner of Victoria’s Secret and Bath & Body Works chains, and teen apparel chain Pacific Sunwear which logged an 8% sales decline.

With banks imploding and consumers spending dwindling, one safe haven for the market could be in the stodgy industrials sector. Companies that make things such as bolts and studs and hydraulic equipment may sound depressingly unsexy.

Industrial companies are actually reporting healthy sales and profits. And there’s nothing sexier than better-than-expected earnings in this ugly market. Investors believe industrials are a safe haven for those tired of seeing more big bank losses, tech companies floundering, and concerns about weak retail spending.

Fundamentally, they are well-positioned to take advantage of the weak dollar and the amount of infrastructure that will be built out in lesser developed countries.