RETAILERS AND CONSUMER STRENGTH IN FOCUS AFTER MEMORIAL DAY WEEKEND

5/25/08 Sunday 2:59 pm CT

By Dave Harris

After the holiday, Wall Street will focus on economic and corporate data that should highlight overall consumer strength. Most of the action is later in the week, with specialty retailers Chico's (CHS) and American Eagle Outfitters (AEO) reporting Wednesday. Costco (COST) and struggling retailer Sears (SHLD) have earnings Thursday. Then Friday, it's personal income and spending numbers.

Surprisingly, profit rose by 40 percent at the Gap (GPS) in the first quarter. I'm starting to like the stock here, but would suggest waiting for the next earnings report to buy. The Gap fell .35 to close at $17.95 Friday.

CVS (CVS) happens to be my second favorite in the drug store sector to Walgreens (WAG). The company said they'll buy back up to 2 billion dollars work of their own stock. While we're on the stores, Target (TGT) has been out of favor recently with in this slower economy. Still, earnings in the quarter beat expectations even though they reported a drop. Profit fell about 8 percent. I was pleasantly surprised. With an earnings multiple of about 15, Target is cheap compared to Wal-Mart's P/E of 17. Long term, I think Target is a buy.

Say what you want about high gas prices, but you need to have an oil company in your portfolio. Oil crossed over $135 a barrel last week. Exxon Mobile (XOM), Chevron (CVX) and Halliburton (HAL) will continue to blow away expectations when it comes to earnings. It’s not too late to buy here.