Technical Analysis on Wal-Mart and Big Lots: Looking to Capitalize on Improving U.S. Consumer Confidence

LONDON, February 25, 2013 /PRNewswire/ --

According to a recent report, U.S. consumer sentiment improved during the month of February as the labor market showed continuing signs of recovery. Meanwhile, the improving housing market and a rally in the stock market are likely to boost consumer spending. All this augurs well for discount, variety stores such as Wal-Mart Stores Inc. (NYSE: WMT) and Big Lots Inc. (NYSE: BIG). StockCall has posted free technical research on Wal-Mart Stores and Big Lots which can be downloaded upon sign up at

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Consumer Sentiment Improves  

Despite concerns over the looming threat of automatic spending cuts or Sequester, U.S. consumer sentiment improved in the month of February. Consumer sentiment has been boosted by an improving labor market. The preliminary reading on the Thomson Reuters/University of Michigan's consumer sentiment index for the month of February came in at 76.3, up from 73.8 in the month of January. The most encouraging thing for Discount, Variety Stores operators was the fact that households with incomes below $75,000 were among the most optimistic.

Improving Housing Market and Rally in Equity Market to Boost Consumer Spending

Consumer spending, meanwhile, is expected to remain strong going ahead. The main drivers will be the improving housing and labor markets, as well as the rally in the equity market.

The housing market has continued to show signs of improvement since last year. And given the fact that interest rates are expected to remain at record low levels for a while, the housing market is expected to continue to make a robust recovery.

Meanwhile, the equity market in the U.S. has been hovering at multi-year high levels. This should further boost consumer spending going forward, which is a positive for Discount, Variety Stores retailers.

In a recent report, the Commerce Department said that retail sales rose 0.1% in the month of January. Although there was only a modest rise in retail sales in January, the data was encouraging, considering the fact that the 2% payroll tax cut expired on January 1.

Wal-Mart Stores Reports Strong Results

Last week, Wal-Mart Stores reported its financial results for the fourth quarter and full year ended January 31, 2013. The Bentonville, Arkansas-based company reported fourth quarter net sales of $127.1 billion, up 3.9% over the same period in the previous year. Sign up and read the complimentary report on Wal-Mart Stores Inc. at

http://www.StockCall.com/WMT022513.pdf

Mike Duke, President and CEO of Wal-Mart Stores, said that the company topped off a really good year with a solid fourth quarter. Duke noted that he has high expectations for fiscal 2014, and is optimistic as he looks ahead. He noted that Wal-Mart Stores is operating in markets that offer continued opportunity for growth, both in its stores and online.

Big Lots Inc.'s Results Eyed

Meanwhile, investors are eyeing Big Lots fourth quarter results, which are scheduled to be released later today. The free report on Big Lots Inc. can be downloaded by signing up now at

http://www.StockCall.com/BIG022513.pdf

Back in December last year, the company had said that it expects fourth quarter consolidated income from continuing operations to be between $1.91 per share and $2.10 per share. The company's guidance was based on a U.S. comparable store sales decline in the range of low to mid single digits. Total sales in the U.S. for the quarter are expected to rise between 3% and 7%.

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