There's a chill in the air and a slight up-tick in confidence. Holiday discounts are coming a bit earlier, too. For retailers, this has been a great combination, leading to the second consecutive month in which retail sales increased.

This follows more than a year of drops. Consumers aren't going crazy, but they are loosening their wallets a little bit. Consumer spending accounts for 70% of the U.S. economy, and the coming holiday season is where the action is -- for the retail sector and, consequently, for everyone else.

Albert Gonzalez faced the music in a U.S. District Court in Boston on Friday, pleading guilty to masterminding one of the biggest cases of identity theft in history. The deal he struck with prosecutors could have him turning big rocks into little ones for up to a quarter of a century.

The Miami resident compromised the computer systems of large, high-profile retailers, including TJX (NYSE: TJX), BJ's Wholesale Club (NYSE: BJ), OfficeMax (NYSE: OMX), Barnes & Noble (NYSE: BKS) and Sports Authority. Tens of millions of credit card numbers were swiped in this scheme, leading to 19 counts of conspiracy, computer fraud, wire fraud, access device fraud and aggravated identity theft -- if there are other charges ... well, you get the point.

Retail sales were down for the twelfth month in a row in August, according to an Associated Press report. Consumers stayed focused on what they need rather than what they want, as unemployment remains high and even those employed worry about the future of their jobs.

The silver lining, though, is that the coming holiday season might not be as bad as many thought.

Some retailers actually showed gains. TJMaxx (NYSE: TJX) and Old Navy, a Gap (NYSE: GPS) company, for example, saw year-over-year sales increases, though upscale stores generally sustained declines. The action on the discount side could be an early sign that the consumer is ready to play.

Albert Gonzalez is calling it quits. Accused of masterminding the largest identity theft in the United States ever, he has agreed to plead guilty in U.S. District Court in Massachusetts. Separate charges filed in New Jersey, however, remain.

The 28 year-old faces 15 to 25 years in prison and will forfeit $1.65 million and a Miami condo (in addition to $1.1 million already seized). If the judge accepts the terms, this would be the longest sentence ever recorded for a hacking case.

When I wrote about The TJX Companies (NYSE: TJX) back in November of last year, I was clearly bearish. Hey, things seemed a lot tougher back then, and the frugal consumer was putting a ton of pressure on retail prices. Now, though, after checking out the company's second-quarter report, I find myself losing some of my negative thoughts about it.

According to the press release, sales increased 4% and earnings per diluted share from continuing operations expanded by 27% to come in at 61 cents. This was a penny better than market expectations, according to Earnings.com.

TJX Companies (NYSE: TJX) is scheduled to report Q4 EPS on February 25. TJX closed at $21.83. TJX February option implied volatility is at 61, March is at 56; above its 26-week average of 52, according to Track Data, suggesting larger price movement.

Kohl's (NYSE: KSS) closed at $37.93. KSS is expected to report Q4 EPS on February 26. Goldman Sachs downgraded KSS to Sell. KSS March option implied volatility of 63 is near its 26-week average, according to Track Data, suggesting non-directional price movement.

Russian business runs on different rules. News Corp.'s (NYSE: NWS) Rupert Murdoch, who has been doing business in China for years, is nervous about his Russian enterprises. This morning, the FBI announced it had rounded up a ring of data thieves, many from former Soviet Union countries. And then there's the little matter of BP-TNK, a joint venture between BP (NYSE: BP) and a Russian company, whose Russian shareholders are booting out its Western executives so they can take over the operation.

Here's what Silicon Alley insider reports Murdoch had to say about doing business in Russia: "We have great growing business there but just -- this is purely me, I'm sorry, I'm -- the more I read about investments in Russia, the less I like the feel of it. The more successful we'd be, the more vulnerable we'd be to have it stolen from us, so there we sell now."

In case you missed it, The Detroit Free Press reports that an international ring of data thieves used wardriving -- the practice of stealing data from unprotected Wi-Fi networks -- to take 40 million identities, use the information to print fake ATM cards, and steal millions of dollars. The corporate victims include customers of TJX (NYSE: TJX), Barnes & Noble (NYSE: BKS), and OfficeMax (NYSE: OMX). Five of the 11 defendants are from former Soviet Union countries -- "one is from Estonia, three are from Ukraine, and one is from Belarus."

The TJX Companies (NYSE: TJX) is a leading off-price retailer of apparel and home fashions in North America and Europe. The firm sells family apparel, accessories, shoes, giftware, jewelry and home furnishings through nearly 2,100 stores in the United States (T.J. Maxx, Marshalls, HomeGoods, A.J. Wright, Bob's Stores), over 250 outlets in Canada (Winners, HomeSense), and 226 T.K. Maxx stores in the United Kingdom and Ireland. Target (NYSE: TGT), Kohl's (NYSE: KSS) and Ross Stores (NASDAQ: ROST) are major competitors.

The company pleased investors last week, when it reported a December same-store sales increase of three percent (y/y) and issued upside guidance for the fourth quarter. Management now sees Q4 EPS of 60-63 cents, versus previous guidance of 58-60 cents and Street consensus of 59 cents. The CEO attributed success to disciplined inventory management and expense control. Analysts also pointed to the tendency of consumers to move to discount-oriented chains in a declining economy.

"The third quarter of the year has historically been the roughest on the stock market," notes advisor Kelley Wright, a specialist in dividend paying stocks.

In his IQ Trends newsletter, he notes, "One could argue that a correction and consolidation would be healthy and is long overdue." That being said, he adds, "The opportunity currently exists to acquire high-quality companies with long-term rising dividend trends."

Within this framework, he sees opportunity in two favorite blue chip retailers -- Wal-Mart Stores (NYSE: WMT) and TJX Companies (NYSE: TJX).

He says, "It seems like every summer we hear analysts agonize over weak retail sales from May and June. I've often wondered if any of these folks have heard of the phenomenon known as 'vacation.'"

He continues, "After a long school year with the seemingly never ending number of trips to pick up the dozens of items that the kids absolutely have to have, I know that my wife doesn't want to go anywhere near a store unless it is a medical necessity."

Says Wright, "The calendar cannot be ignored so I suspect that when Uniform Day (as they call it at my kids' school) rolls around in mid-August, parents across the fruited plain will be descending en mass to pick up clothes, shoes and the requisite supplies for another school year. And, he states, "I believe both Wal Mart and TJX Companies will be potential beneficiaries of this impending spending spree."

Wright explains, "Both companies are ranked A+ by S&P for their earnings and dividend quality. In addition, both stock have excellent dividend histories. It is a fortunate circumstance when quality and value intersect with opportunity."

Each day, Steven Halpern's TheStockAdvisors.com features the latest investment ideas and market commentary from the financial newsletter community.