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UPDATE: Are Retailers Cracking or Crackling?

With so much talk about the weak consumer, investors were all but stunned by new results which suggest consumer are willing to open their wallets, after all.

8 out of 10 retailers who report same store sales beat estimates for September – some of them posting big beats. And to make the results all the more surprising -- teen specialty names performed particularly well.

Take a look at some of the big beats.

RETAIL SALES – THE BIG BEATS

Sept. Same-store sales
Expected. Actual

Nordstrom 4% 8%
Macy’s 3% 5%
Limited 4% 12%
Abercrombie 3% 13%
Aeropostale -2% 3%
The Buckle -5% 9%
Zumiez 12% 17%

How should you position now!

Instant Insights with the Fast Money traders

The surprise was that specialty retail was so strong, muses Joe Terranova. A good back-to-school season typically bodes well for the holidays. There’s a high correlation there. If you’re looking for a trade Costco is getting beaten up. I’d buy the weakness.

The fact that the specialty names performed so well is making me incrementally more bullish, echoes Jon Najarian. That says consumers are more confident going into stores where they know they will play more money. And I don’t think this is a one-off event, he adds. I’m seeing traffic in stores increase dramatically. It seems to me it’s better than it been in the last 6 months. That bodes well for the holidays.

If you're looking for a trade, I’m watching Abercrombie , says Steve Grasso. The shorts got very bold when the company reported a sharp increase in inventory back in August. If this stock trades above $42.5 I think it’s off to the races.

I’m skeptical of the retailers broadly, counters Steve Cortes. Considering the run these names have already had I can’t get excited. And with 10% unemployment they’re in tough environment.

I’d recommend looking at a long position in high end retailers such as Saks or Nordstrom , says Citi analyst Deborah Weinswig. Also, into holidays Macy’s and Target are attractive.

Don't forget there are reports suggesting that Gymboree is putting itself up for sale, says Karen Finerman. That could generate tailwinds for Children's Place.







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Trader disclosure: On Oct. 7, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Terranova Owns (APA), (AAPL), (IBM), (EOG), (HES), (OIH), (OXY), (ORCL), (RSH), (UPL), (SU), (VRTS), (XBI), (RIG), (VRTS), (FTO), (PEP), (JOYG), (C); Terranova Is Long (GLD) Puts; Terranova Is Long (FCX) Puts; Terranova Is Long (JOYG) Puts; Terranova Is Long (OIH) Puts; Terranova Is Long (FFIV) Puts; Karen Finerman owns (JCG); Karen Finerman owns (GYMB); Karen Finerman owns (AEO); Karen Finerman is short (ANF); Karen Finerman's firm is long (BP); Karen Finerman's firm is long (YUM); Karen Finerman's firm is long (GENZ); Karen Finerman's firm is long S&P 500 Puts; Karen Finerman's firm is long Russel 2000 Puts; Karen Finerman's firm is short (JR); Karen Finerman's firm is short (MDY); Karen Finerman's firm is short (IWM); Karen Finerman's firm is short (SPY); Cortes Is Short (XLF); Cortes Is Short (BAC); Cortes Is Short (BIDU); Cortes Is Short Euro; Cortes Is Short Mexican Peso; Cortes Is Long German Bonds; Pete Najarian is long (AA) Calls; Pete Najarian is long (MAR) Calls; Pete Najarian is long (YUM) Calls; Pete Najarian is long (AKAM) Calls; Pete Najarian is long (BP) Calls; Pete Najarian is long (BEXP) Calls; Pete Najarian owns (BRCD); Jon Najarian Owns (BKE); Jon Najarian Owns (ZUMZ); Jon Najarian Owns (ADBE), Is long (ADBE) Call Spreads; Jon Najarian Owns (DCTH), Is long (DCTH) Call Spreads; Jon Najarian Owns (ANF), Is Short (ANF) Calls; Jon Najarian Owns (LTD), Is Short (LTD) Calls; Jon Najarian Owns (AEO), Is Short (AEO) Calls; Jon Najarian Owns (AA) Call Spreads; Jon Najarian Owns (SVNT) Call Spreads; Jon Najarian Owns (BEXP) Calls; Jon Najarian Owns (JCP) Calls; Grasso owns (ASTM), (BA), (BAC), (C), (CSCO), (JPM), (LPX), (MO), (MOT), (NDAQ), (PFE), (PRST)

For Joe Terranova
Terranova is chief market strategist of Virtus Investment Partners, LTD.
Virtus Investment Partners own more than 1% of (ABAX)
Virtus Investment Partners own more than 1% of (ALK)
Virtus Investment Partners own more than 1% of (AMKR)
Virtus Investment Partners own more than 1% of (CASS)
Virtus Investment Partners own more than 1% of (CSVI)
Virtus Investment Partners own more than 1% of (IGE)
Virtus Investment Partners own more than 1% of (LDR)
Virtus Investment Partners own more than 1% of (LPHI)
Virtus Investment Partners own more than 1% of (MGRC)
Virtus Investment Partners own more than 1% of (NRCI)
Virtus Investment Partners own more than 1% of (DBV)
Virtus Investment Partners own more than 1% of (XLB)
Virtus Investment Partners own more than 1% of (XLP)
Virtus Investment Partners own more than 1% of (XLY)
Virtus Investment Partners own more than 1% of (XLF)
Virtus Investment Partners own more than 1% of (XLI)
Virtus Investment Partners own more than 1% of (XLU)
Virtus Investment Partners own more than 1% of (SUBK)
Virtus Investment Partners own more than 1% of (WDFC)
Virtus Investment Partners own more than 1% of (YDNT)
Virtus Investment Partners own more than 1% of (DRYS)

For Steve Grasso:
Stuart Frankel & Co and it’s partners own (AMGN)
Stuart Frankel & Co and it’s partners own (BAX)
Stuart Frankel & Co and it’s partners own (COG)
Stuart Frankel & Co and it’s partners own (CUBA)
Stuart Frankel & Co and it’s partners own (GERN)
Stuart Frankel & Co and it’s partners own (HPQ)
Stuart Frankel & Co and it’s partners own (HSPO)
Stuart Frankel & Co and it’s partners own (MERC)
Stuart Frankel & Co and it’s partners own (NWS.A)
Stuart Frankel & Co and it’s partners own (NYX)
Stuart Frankel & Co and it’s partners own (PDE)
Stuart Frankel & Co and it’s partners own (PFE)
Stuart Frankel & Co and it’s partners own (PRST)
Stuart Frankel & Co and it’s partners own (RDC)
Stuart Frankel & Co and it’s partners own (TLM)
Stuart Frankel & Co and it’s partners own (XRX)
Stuart Frankel & Co and it’s partners own (SDS)
Stuart Frankel & Co and it’s partners are short (QQQQ)

For Deborah Weinswig
An Employee Of Citigroup Global Markets Or Affiliates Is A Trustee Of (TGT)
Citi Employees Own (WMT), (JCP)
Citigroup Global Markets or Affiliates Owns 1% Or More Of (SKS)
Citigroup Global Markets Or Affiliates Has Managed Or Co-Managed An Offering Of (DG), (HD), (TGT), (WMT) In Past 12 Months
Citigroup Global Markets Or Affiliates Received Investment Banking Compensation For Services Provided In Past 12 Months From (DG), (KR), (SKS), (TGT), (WMT)
Citigroup Global Markets Or Affiliates Expects To Receive/Seek Investment Banking Compensation From (HD), (KR), (WMT) In Next 3 Months
Citigroup Global Markets Or Affiliate Received Non-Investment Banking Compensation From (HD), (JCP), (KSS), (KR), (M), (SWY), (SVU), (TGT), (WAG), (WMT), (COST) In Past 12 Months
(DG), (HD), (KR), (SKS), (TGT), (WMT) Are Or In Past 12 Months Were Investment Banking Clients Of Citigroup Global Markets
(CVS), (DG), (HD), (JCP), (KSS), (KR), (M), (SWY), (SKS), (SVU), (TGT), (WAG), (WMT), (COST) Are Or In Past 12 Months Were Non-Investment Banking Clients Of Citigroup Global Markets (Securities-Related Serices)
(HD), (JCP), (KSS), (KR), (M), (SWY), (SVU), (TGT), (WAG), (WMT), (COST) Are Or In Past 12 Months Were Non-Investment Banking Clients Of Citigroup Global Markets (Non-Securitites-Related Services)
Citigroup Global Markets Or Affiliate Received Compensation From (DG) In Past 12 Months
Citigroup Global Markets Is A Market Maker In (CVS), (M), (COST)
Citigroup Global markets And/or Affiliates Has A Significant Financial Interest In Relation To (CVS), (HD), (KSS), (KR), (LOW), (M), (JWN), (SWY), (SKS), (SVU), (TGT), (WMT)
Citigroup Global Markets Or Affiliates Owns 5% Or More Of (SKS)

For Mike Olson
(ROVI) has been an investment banking client of Piper Jaffray during the past 12 months
Piper Jaffray is a market maker in (AAPL)
Piper Jaffray is a market maker in (ADBE)
Piper Jaffray is a market maker in (ADSK)
Piper Jaffray is a market maker in (AKAM)
Piper Jaffray is a market maker in (AVID)
Piper Jaffray is a market maker in (CSTR)
Piper Jaffray is a market maker in (CTRP)
Piper Jaffray is a market maker in (DTSI)
Piper Jaffray is a market maker in (EXPE)
Piper Jaffray is a market maker in (LNW)
Piper Jaffray is a market maker in (NFLX)
Piper Jaffray is a market maker in (PCLN)
Piper Jaffray is a market maker in (PMTC)
Piper Jaffray is a market maker in (RNWK)
Piper Jaffray is a market maker in (ROVI)
Piper Jaffray is a market maker in (SFLY)
Piper Jaffray is an occassional market maker in (DLB)
Piper Jaffray is an occassional market maker in (OWW)
Piper Jaffray is an occassional market maker in (STV)

For Simon Baker
Simon Baker Owns (SLW)
Simon Baker Owns (IGTE)
Simon Baker's Firm Owns (SLW)

CNBC.com with wires.

Symbol
Price
 
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ANF
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COST
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JWN
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M
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PLCE
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SKS
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