Retail Sector Moving Up Following An Upgrade By Moody's (BGP, GE, RSH, BBY, BKS, CHS)

The retail industry has moved into positive territory after Moody's Investors Service upgraded the sector and said that it expects credit conditions to improve for the industry over the next 12 to 18 months. Moody's also expects operating income in the sector to grow in mid-single digits, driven by cost cuts and consumer spending. However, the agency said that same-store sales, which had reached record levels in March, will fall.

According to Moody's, drugstores, discounters and auto-parts retailers were the most stable segments in retail. The agency believed that the department store sector will continue to be under pressure. While pent-up demand will continue to help in stabilizing the home-improvement sector, supermarkets seem to be in the middle of a turnaround.

Several retail stocks were on an upswing on Monday afternoon:

Borders Group (NYSE: BGP) has climbed 4.38% to $3.10. The company had received a $700 million loan facility from General Electric's (NYSE: GE) GE Capital.

Shares of Best Buy Co (NYSE: BBY) gained 1.38% after being upgraded by FBR Capital. Analyst Stephen Chick said that BBY, the leading electronics retailer, could have a "strategic interest" in its rival RadioShack Corp (NYSE: RSH), as it would yield a complimentary strategic fit and synergies.

In another news, BBY and bookseller Barnes & Noble Inc (NYSE: BKS) announced that Best Buy will be carrying BKS’ Nook digital eBook reader device in an exclusive deal. BKS’ shares fell 1.05% after rising 1.2% to $23.09.

Chico's FAS Inc (NYSE: CHS) shares climbed 1.1% to $14.73 on revised expectation of same-store sales by FBR Capital Markets. The investment bank said that the women's clothing retailer could post a 14% jump in its same-store sales in the first quarter, instead of the previous estimate of 10%. FBR Capital Markets believes that pent-up demand and a rise in television advertising spending have benefited Chico's FAS.

Read more from Benzinga's Markets.