By Andria Cheng
Retail stocks opened higher Thursday, led by Best Buy Co., after
the largest U.S. electronics retailer posted a
smaller-than-expected decline in its fourth-quarter profit and gave
an outlook that topped Wall Street expectations.
Best Buy (BBY) shares surged 14% to $37.97. The
Minneapolis-based retailer, expected to benefit from the demise of
its smaller rival Circuit City Stores Inc., said profit dropped 23%
after it sold more profitable items such as cell phones and
warranty services to help make up for consumers' broad cutbacks in
discretionary spending.
Still, Best Buy isn't without competition of its own as
retailers such as Wal-Mart Stores Inc. (WMT) expand their footprint
in electronics. Wal-Mart, part of the Dow Jones Industrial Average,
saw its shares up 1.3% to $52.39.
Smaller electronics retailer RadioShack Corp.'s (RSH) shares
were up 5.2%. Staples Inc. (SPLS), which sells some electronics
products and computers, saw its shares up 5.1%.
Among other gainers, Nordstrom Inc. (JWN) shares rose 4.2%.
The S&P Retail Index (RLX) rose 2.6% to 296.16 even after
the Commerce Department reported that the fourth-quarter U.S.
economy contracted at a more-than previously-estimated 6.3%, on
hope that the worst may be behind for the U.S. economy.
Meanwhile, the Labor Department said the number of people
collecting state unemployment benefits reached yet another new
record, jumping 122,000 to a seasonally adjusted 5.56 million,
showing the job market's considerable strain.
-Andria Cheng; 415-439-6400; AskNewswires@dowjones.com