Chicago, IL, Dec. 3, 2002--Wal-Mart Stores Inc. and J.C. Penney Co. Inc. led a retail sector stock rally on Monday as robust sales over the first holiday shopping weekend raised hopes of a stronger-than-expected season and soothed concerns about a sluggish U.S. economy.
The National Retail Federation said three out of four consumers hit the shops over the weekend, according to its holiday survey released on Monday. Retailers reported strong demand for clothing, consumer electronics, jewelry, books and toys.
Online retailers including Amazon.com Inc. also racked up huge sales gains as consumers shunned the crowds at the mall and shopped at home. Online retail sales jumped 61 percent to $234.2 million on the Friday after Thanksgiving, according to Bizrate.com, an online price comparison service.
J.C. Penney, which operates its namesake department stores and the Eckerd drugstore chain, said its Thanksgiving weekend sales reached a record, but did not disclose any figures.
Wal-Mart, the world's biggest retailer, posted its biggest-ever one-day sales tally on Friday -- a whopping $1.43 billion, up 14 percent from last year's $1.25 billion.
"This tells us that the biggest fear that Wall Street had -- that the consumer was going to shrivel up and die -- isn't happening," said Diane Swonk, chief economist with Bank One. "That doesn't mean they can be the Atlas they have been, but the consumer continues to spend."
Consumer spending accounts for some two-thirds of U.S. economic activity, so any sign of a slowdown triggers concerns about the health of the economy.
The Thanksgiving weekend kicks off the holiday shopping season, which generates roughly a quarter of retailers' annual revenue and the lion's share of profit for popular gift destinations like electronics stores and clothing chains.
Before the weekend, analysts were widely predicting a mediocre shopping season as a slumping economy and the threat of war with Iraq stifle spending.
But consumer confidence levels picked up from nine-year lows and other economic indicators edged up in the week leading up to Thanksgiving, prompting some industry experts to predict holiday demand may not be as gloomy as initially feared.
