J. C. Penney Inc. (NYSE: JCP) has been sliding today, setting a new 52-week low. It's in good company. The entire retail sector is flailing after the Labor Department reported that applications for jobless benefits rose to 337,000 last week, the largest amount since early February, leading investors to fear that consumer spending could tighten even more as we head into the holiday season.
Also lending to the department store's woes, competitor Bon-Ton Stores Inc (NASDAQ: BONT) warned on Wednesday that the company would likely miss 2007 earnings estimates. If you think that these factors are enough to weigh down J. C. Penney's stock over the next few months, then now could be a good time to take a look at a bearish hedged trade on JCP.
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