Sector Wrap: Retail, Food and Beverage, Transportation
Thursday, November 12, 4:35 PM ET

In the retail sector, the news has been dominated by earnings this week with Wal-Mart (NYSE:WMT), Macy's (NYSE:M) and Kohl's (NYSE:KSS) all reporting results. Macy's reported on Wednesday morning that its third quarter loss had narrowed to eight cents per share, but investors were focused on the fourth quarter guidance that fell short of the consensus estimate. Kohl's, however, did not disappoint when the retailer announced third quarter earnings this morning. The company reported earnings and revenue both climbed year-over-year which sent the stock higher in afternoon trading. Wal-Mart reported similar results, as earnings and revenue were both on the rise. Also helping the stock was encouraging guidance from the company which had the high and low end of the forecast climbing for 2009.

The good news has outweighed the bad in the retail sector as the Retail HOLDRs ETF (AMEX:RTH) was trading higher by more than one and a half percent this week, despit being flat today.

There were mixed results coming out of the food and beverage sector this week as CKE Restaurants (CKR) and McDonald's (NYSE:MCD) both issued October sales figures to investors. McDonald's saw same store sales increasing by 3.3 percent in October despite U.S. sales declining by 0.1 percent in the month. This marked the first time in more than eighteen months that same store sales in the US had fallen, but strong results out of Europe and Asia helped drive overall sales for the company. CKE Restaurants, however, could not match the results produced by the fast food giant. The operator of Carl's Jr. and Hardee's saw same store sales fall by five percent in October as "deep-discount burger wars" have hampered sales.

While the PowerShares Food & Beverage ETF (AMEX:PBJ) is trading higher on the week by one percent, it has underperformed the major averages so far this week.

And if there was ever a sector that needed good news this year, it would have to be the transportation sector. When the recession began last year, shipping volumes fell drastically forcing major companies like UPS (NYSE:UPS) and FedEx (NYSE:FDX) to layoff workers, but with the economy recovering, both companies have shown signs of optimism returning. UPS is looking for volume growth in 2010 as CEO Scott Davis believes the recovery is real and sustainable. And FedEx reported its busiest day for 2009 will be December 14th with package volume expected to be 13 million, ahead of last year's volume.

The good news from the transportation giants has translated into positive returns for investors as the iShares Transportation ETF (AMEX:IYT) is trading higher by more than three percent this week despite today's modest pullback.