"Black Friday" was just a bad joke. Retail sales were good that day, but after a big pop, it has been downhill. Holiday spending dropped after that, and, in certain big specialty retailers, sales are up only .5% between Thanksgiving and the end of the second week in December.

Reuters writes that "Across the board we’ve had a regression in growth since Black Friday to moderate levels or somewhat flat levels," said Michael McNamara, SpendingPulse’s vice president of research and analysis"

If the trend holds, stocks in some large American retail companies could get hurt badly. Start with the Gap (GPS). It has recovered some from management and product problems which started about two years ago. It now trades near the high end of its range at $21.18. The shares could take a real slide if the holiday spending trend does not change.

But, the stocks that are in real trouble if things do not pick up are the ones that the market has already left for dead. Start with Sears (SHLD). A lot of the evidence from research firms like comScore shows that the real weakness in holiday spending is at lower income levels. Sears trades at $105, near its 52-week low. Bad numbers for Q4 could send shares below $100 and even south of $90.

Wal-Mart (WMT) is also particularly vulnerable because it caters to low income shoppers. It trades near the middle of its range at $47.63. Bad Christmas numbers could move it to its one-year low of $42. The is also the company’s five year low.

Target’s (TGT) shares are down a third from their 52-week high. At just above $50, they could certainly slide to $45, where they traded 18 months ago.

If the numbers are right,and high end consumers are still shopping, that will do nothing for the big discounters which get most of their sales from a lower and middle class customer base.

Douglas A. McIntyre 

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.