By Aarthi Sivaraman
NEW YORK (Reuters) - Retail shares traded lower on Friday following data showing the first decline in holiday sales in at least 40 years, though some stores defied the trend as investors bet the worst news was priced into the sector.
The Standard & Poor's Retail Index <.RLX> fell 0.1 percent, with department store chains like Dillard's
Stocks that rose included specialty clothing retailers such as AnnTaylor Stores Corp
Among discount retailers, Wal-Mart Stores Inc
"What a lot of people are looking at right now... is they are saying this is as bad as it is going to get," said Patricia Edwards, a retail consultant at Storehouse Partners.
"(People are thinking) things are going to get better. Stocks are cheap, let's fish in our portfolios today for the coming year," she said. "If they are short, they are covering, and if they haven't had any, they are buying some. It is a value play."
Data from SpendingPulse, the retail data service of MasterCard Advisors, showed that sales fell 2 percent in November and 4 percent from December 1 to December 24. The firm called the 2008 holiday shopping season "one of the most challenging ... we've ever had in modern times.
Overall, holiday sales fell as much as 4 percent, excluding gasoline, according to SpendingPulse data, which provides estimates for U.S. retail sales across all forms of payment including check and cash.
Consumers who have contended with a year-long recession, job losses and tight credit, largely cut their spending this holiday shopping season, which could be the worst in up to 40 years. Edwards warned that the country's economic troubles could extend well into 2009.
"These (sales) numbers do not yet fully reflect what the consumer is in for in the next year and the reality of what's going to happen," she said.
The holiday shopping season usually commences the day after U.S. Thanksgiving, which fell on November 27 this year, till the eve of Christmas on December 24.
Luxury sales, which have taken a particularly hard beating, fell more than 34 percent, or a bit more than 21 percent excluding jewelry sales, according to SpendingPulse.
Shares of upscale department store chain Saks Inc
Electronics and appliance sales plunged over 26 percent, according to SpendingPulse. Shares of electronics retailer Best Buy Co Inc
(Editing by Leslie Gevirtz)
