A rising market is putting new luster on luxury retailers

As unemployment soars and consumer credit dries up, some investors have braced for a "new frugality" with battered consumers cutting spending and looking for cheaper goods. But Wall Street is now betting that the fortunes of expensive luxury retailers may actually look much brighter than that of their more cost-conscious peers.

On Monday, the Census Bureau reported October retail sales grew 1.4% -- including autos and restaurants. Against this backdrop comes Goldman Sachs's new, more bullish outlook for the luxury retail sector in particular. The firm upgraded expensive retailers Nordstrom (JWM), Coach (COH), Saks (SKS) and Tiffany (TIF).