Why Shares of J.C. Penney Surged Today
What happened
Shares of department store chain J.C. Penney (NYSE: JCP) jumped on Tuesday without any company-specific news driving the gain. Instead, it appears that optimism about a solid holiday season for retailers, coupled with J.C. Penney's expected release of holiday sales results, is pushing up the stock. Shares were up about 10% at 12:10 p.m. EST.
So what
There's been some reason for optimism in recent weeks that holiday retail sales would come in stronger than expected. The Commerce Department reported in December that retail and food sales in November were up 5.8% year over year, and up 0.8% from October on a seasonally adjusted basis.
Later in December, Mastercard SpendingPulse added another data point. The report put retail sales, excluding automobiles, between Nov. 1 and Christmas Eve up 4.9% year over year, the best performance since 2011.
J.C. Penney desperately needs a win. The stock got hammered in 2017, losing more than 60% of its value. It's down a whopping 93% from its 10-year high.
Now what
Whether or not a strong holiday season for retailers in general translates into a strong season for department stores remains to be seen. The Commerce Department data for November put adjusted department store sales up just 1.7% year over year, a much smaller increase than overall retail. Still, even middling comparable sales growth for J.C. Penney might be enough to propel the stock higher.
We'll know more later this week, assuming J.C. Penney sticks with precedent and releases holiday sales data.
10 stocks we like better than J.C. PenneyWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and J.C. Penney wasn't one of them! That's right -- they think these 10 stocks are even better buys.
Click here to learn about these picks!
*Stock Advisor returns as of January 2, 2018
Timothy Green has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.