Aside from Wal-Mart (WMT), retailers like Target (TGT), Kohl's (KSS), JC Penney (JCP), Federated (FD), and Coach (COH), to name a few, have reported very good results. Last night Abercrombie and Fitch (ANF) raised guidance for the second half of 2006 and the stock is up nearly $7 per share today. (Note: Conference call transcripts for these companies can be found here)
The takeaway point here is that even though the housing market is soft, interest rates have risen substantially, and gas is north of $3 per gallon, the U.S. consumer is not going into hiding. Gas prices were over $3 this time last year, interest rates are still not extremely high compared with historical averages, and most people don't have adjustable rate mortgages or rely on investment properties for income.
There is no doubt that the lower end will struggle to make ends meet moreso than others, and Wal-Mart's lackluster results shows evidence of that. However, if you focus on areas of consumer spending that won't be adversely affected as much, namely the high end and the teenage segment, stock prices could do very well despite all of the people out there warning of impending doom.