Retail Investors Sweating It

Retail investors greeted the third week before Christmas with caution as the mix of heavy discounting in stores and cash-strapped consumers escalated concerns of a challenging December shopping season.

The Standard & Poor's Retailing Index and the Dow Jones Retail Index both fell just under 1 percent. Both indices have dropped just over 2 percent since "Black Friday," the day after Thanksgiving considered to be the traditional start of the holiday shopping season.

Shares of Target Corp. (TGT.N: Quote, Profile, Research), Sears Holding Corp. (SHLD.O: Quote, Profile, Research) and Office Depot Inc. (ODP.N: Quote, Profile, Research) fell more than 2 percent, with Gap Inc. (GPS.N: Quote, Profile, Research) and Kohl's Corp. (KSS.N: Quote, Profile, Research) dipping nearly 2 percent and trendy apparel retailers like Bebe Stores Inc. (BEBE.O: Quote, Profile, Research) and Aeropostale Inc.(ARO.N: Quote, Profile, Research) down 2.6 percent and 4.2 percent, respectively.

Department store stocks, also, started the week sluggishly, with Federated Department Stores Inc. (FD.N: Quote, Profile, Research) falling more than 2 percent and Nordstrom Inc. (JWN.N: Quote, Profile, Research) down 1.8 percent.

Read more at Reuters.com.

Without strong sales performance during the Holiday season, look for a new wave of consolidations and shakeouts in the retail sector. What does this say about your local Target. Wal-Mart, or Kohl's store in 2006? Think about it.