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|Includes: ANF, ARO, BKE, CATO, COST, FRED, GPS, LB, MAR, PriceSmart, Inc. (PSMT), RAD, ROST, ZUMZ

By Carlos Guillen

It is simply "incredible." The Dow Jones Industrial Average is continuing to ramp higher after reaching all time highs just two days ago. What is even more encouraging is that the index is showing no signs of pulling back at the moment. ADP data yesterday, followed by a better than expected initial claims result today, are serving to give investors confidence that tomorrow's government jobs data will also come in favorably.

Quite encouraging today was a key measure of U.S. job layoffs falling to a five-year low; clearly an encouraging sign for the strengthening labor market ahead of tomorrow's broader employment report. According to the Department of Labor, initial claims during the week ended March 2 totaled 340,000, decreasing from the 347,000 revised figure reported for the prior week and landing below the Street's estimate of 350,000. The fact that the number continued below 350,000 is certainly encouraging; however, this also occurred in January and then it jumped back above. The initial claims' four-week moving average was 348,750, decreasing from the prior week's average of 355,750 and finally breaking below the 350,000 mark for the first time since March 2008. While the jobs market is still unsatisfactory, at least the small improvement is giving a bit of hope.

A bit discouraging today was that the U.S. trade deficit increased more than expected in January, as exports decreased while imports climbed, a scenario that was the opposite of what occurred in the prior month. According to the U.S. Department of Commerce, the trade deficit during January totaled $44.4 billion, increasing from the $38.1 billion reported for December and landing above the Street's consensus estimate of $43.0 billion. In terms of the two main components, exports decreased 1.17 percent to $184.5 billion, as overseas demand eased mainly for industrial supplies and materials, as well as other goods. Imports climbed 1.84 percent to $228.9 billion, mainly as domestic demand increased for industrial supplies and materials; other goods; and capital goods. The fact that our exports declined while our imports rose does not bode well for first quarter GDP here at home.

In all, it is remarkable to see that the Dow is above levels seen back in 2007, before the financial meltdown. Of course, this thought does bring mixed feelings and, therefore, some caution. At the moment all eyes are looking to see the numbers the government will deliver tomorrow, so some pressure will likely develop toward the end of the session.

Retail Rundown

A number of February retail same store sales results came in today and on balance you'd have to say they are pretty underwhelming and that's been somewhat of a trend so far this year. In a way you can't really blame consumers for having been cautious through February, with payroll taxes taking an extra 2% out of income and with the timing of tax refunds holding back purchases.

Beat Consensus
* PriceSmart (NASDAQ:PSMT) +8.9% vs. 6.5% expected
* Costco (NASDAQ:COST) +6.0% vs. +4.6% expected
* Gap (NYSE:GPS) +3.0% vs. +2.3% expected
* Limited Brands (LTD) +3.0% vs. +2.8% expected
* Fred's (NASDAQ:FRED) -1.5% vs. -1.7% expected
* Buckle (NYSE:BKE) -1.1% vs. -2.3% expected
* Cato (NYSE:CATO) -3.0% vs. -5.0% expected

Missed Consensus
* Zumiez (NASDAQ:ZUMZ) -8.9% vs. -1.3% expected
* Rite Aid (NYSE:RAD) -3.6% vs. -1.0% expected
* Ross Stores (NASDAQ:ROST) -1.0% vs. +1.3% consensus
* Stein Mart (NASDAQ:SMRT) +0.6% vs. +0.7% consensus

As you can see, even a lot of the companies that beat expectations still posted negative comps anyway, and among the biggest year over year comps the magnitudes overall weren't all that impressive. The most impressive gain came from PriceSmart, which is a Latin American retailer.

Nevertheless various apparel companies including teen retailers like Abercrombie (NYSE:ANF) and Aeropostale (NYSE:ARO) are getting a lift, helped by the takeover of Hot Topic (NASDAQ:HOTT) by Sycamore Partners at a 30% premium.