5 Back-to-School Stocks for a Bloody Market

The market's been bruised, battered, bloodied and beaten up badly over the
past month. The S&P 500 Index is down more than 14% since its July peak, making
this one gigantic bummer summer for the bulls. Now investors are looking
anywhere for some signs of good news, and perhaps a bit a reprieve from the
overwhelmingly bearish sentiment we've seen on Wall Street. That respite from
the downturn could come thanks to the seasonal back-to-school bounce in some of
the nation's most prominent retailers. (See my recent article on 5 Stocks to
Survive a Wicked Downturn ). We've already seen some strong earnings results
from a number of high-profile retailers, as second-quarter profits have been
outstanding in the face of a declining market. However, the selling in the broad
market has served to put pressure on even the best-of-breed back-to-school
retailers. But the market's widespread selling actually could turn out to be
good for astute back-to-school bargain shoppers, because getting in on the right
stocks in the space now could pay off big time when the bulls return to Wall
Street. Here are five back-to-school stocks for a bloody market. Target The
cheap-chic retailer just posted better-than-expected second-quarter earnings
that came complete with a full-year forecast that topped even the most
optimistic analysts opinions. Target (NYSE: TGT ) said it expects full-year
profits to range from $4.15 to $4.30 per share, while analysts are looking for
just $4.14 per share. Target's full-year profit target could hit the bulls-eye
if the company has a good back-to-school buying season. As you can see here in
the 12-month chart of TGT, the stock took a tumble in early August, even
breaking below the 50-day moving average. Those shares now are back above that
mark, and they appear headed toward the 200-day average at $51.75. Good August
and September sales could be the catalyst this retailer needs to build on its
current rally. Staples The office retailer sells plenty of back-to-school
supplies for the kids, including paper, backpacks, electronics, pens, etc. Of
course, its also the leading retailer for the small-business and home-office
customer. Staples (NASDAQ: SPLS ) also recently posted better-than-expected
second-quarter earnings that included a boost in its full-year outlook. The
company said it now expects full-year earnings to range from $1.42 to $1.48 per
share, which is up nicely from its prior outlook for EPS of $1.35 to $1.45. The
chart here of SPLS shows a stock that's taken a big hit since May. It also
shows a beaten-down retailer coming up off the canvas just in time for a
back-to-school rally.