Retailers on Thursday will report December sales results, taking the wraps off their holiday season and possibly showing the best comparisons in 20 months

Besides retailers, investors will focus on the weekly jobless claims report at 8:30 a.m., of particular interest ahead of Friday’s key December jobs report.

“I think people are just starting to ease money into this market. We’ve seen some programs,” said Patrick Boyle of LaBranche Financial. “I am assuming you’re going to see retirement money coming in and getting put to work in January. It always happens that way.”

Boyle said investors will focus on the retailers Thursday, but the next catalysts should be the jobs report and then the coming earnings season. “All the focus is going to be on the next three weeks of earnings. I think that’s more important for the short term than this jobs number, but it will create a little volatility and I think people are looking for that.”

Expectations are for a loss of 10,000 non farm payrolls, but there are some economists who expect to see a positive number for jobs. “If the jobs number is positive, then everything goes higher,” he said.

Retail analyst Daniel Binder follows big box stores for Jefferies, and he thinks there could be some better than expected news in the sales numbers.

Target [TGT  49.65  0.92  (+1.89%)   ] is one he thinks could show an upside surprise from its plan of a 1.5 percent decline. He said the number could be as much as a 2 percent gain. Costco also could produce a surprising gain of 7 to 8 percent, or 2 to 3 percent after international sales and gasoline are stripped out. The story for Costco, he said, could be margin improvement.

A loser could be B.J.’s Wholesale [BJ  33.44  0.91  (+2.8%)   ]. “I think B.J.s will be one of the standouts coming up short of plan. Their plan was 5 to 7 percent for November and December,” he said. November was already a little lighter than expected, and the major December snow storm on the east coast affected the areas around about 70 percent of B.J.’s store base.

Binder said Best Buy [BBY  40.91  -0.30  (-0.73%)   ] is expected to show a 7 to 9 percent increase, when it reports sales on Friday, after most of the rest of the industry. He also said Family Dollar‘s [FDO  30.92  3.43  (+12.48%)   ] better than expected report  Wednesday was a good sign for Wal-mart [WMT  53.56  -0.13  (-0.24%)   ], which shares the same core customer but does not issue monthly sales. “After a slow fall season, they went from comping 2.4 percent for fiscal first quarter to coming up 4 percent in December,” he said.

Bed Bath and Beyond [BBBY  39.23  0.56  (+1.45%)   ] released earnings after Wednesday’s bell, reporting a surprise earnings increase of 73 percent to $151.3 million, and it raised its forecast for the year. Bed Bath and Beyond, in part, has benefited from the bankruptcy of its formal rival, Linens and Things .

“The (holiday) season will probably show a 2 to 3 percent increase. That’s my guess,” said Binder.

Several earnings releases are expected Thursday, including Constellation Brands [STZ  16.13  0.21  (+1.32%)   ] and Lennar [LEN  13.70  0.15  (+1.11%)   ] ahead of the open. Apollo Group [APOL  63.70  1.95  (+3.16%)   ] reports after the close.

Stocks meandered once more Wednesday, with the Dow finishing up 1 at 10,573; the Nasdaq down 7 at 2301, and the S&P 500 rising just under a point to 1137.

“Anyone trading the indexes right now is frustrated..but underneath the surface, there’s a lot of great action. The sector rotation has been great for traders,” said Scott Redler, who follows the market’s technicals at T3Live.com.

Best performers Wednesday were materials, up 1.5 percent and energy, up 1 percent.  Some key commodities also moved higher as the dollar declined against the euro. Oil was up $1.41 to $83.18 per barrel and gold rose $17.80 per ounce to $1,136.50.

Redler said some stocks that were in favor between Christmas and New Year’s have lost some ground, but others have moved up. Solars, like Solarfun Power and JA Solar rose sharply after Oppenheimer raised estimates. Metals got a push from Goldman Sachs, with names like U.S. Steel moving higher. Alcoa jumped 5 percent.

Financials were up 0.4 percent. “The XLF (financial ETF) broke its fifty day moving average Monday and has had a nice follow through for the past two days. The early birds saw this when Goldman Sachs broke its downtrend on December 30,” said Redler.

 

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