Credit Crunch Doesn't Dampen Retail Numbers

Better-than-expected retail sales figures for August, which built on healthy back-to-school and luxury shopping, raised hopes today that turbulent markets won't take too big of a bite out of holiday-season sales. Wal-Mart and Target made out well, as did luxury emporiums such as Saks. "It bodes well for Christmas," one analyst tells MarketWatch.

Sales also benefited from later back-to-school dates, tax-free shopping days, and cheaper gas. But the pace is still expected to slow, and economists don't expect the problems plaguing the larger picture to skip over the retail sector. "It's pretty clear a lot of the activity is fueled by deep discounting," says one. (More retail stories.)