Sears Holdings Shares Popped: What You Need to Know


Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of retailer Sears Holdings (NAS: SHLD) were climbing higher today, gaining as much as 11% in intraday trading.

So what: It's been a heady week for Sears' stock. Earlier in the week, shares were flying upward after rumors swirled that Eddie Lampert and Bruce Berkowitz may take the battered company private. Today, the good times continued to roll as investors reacted positively to reports that CIT Group (NYS: CIT) will begin financing Sears' vendors again.

Last week, Sears investors were gnawing on their nails after it was reported that CIT had shown the company's vendors the hand when it came to providing them with financing to sell to Sears. That CIT may be willing to provide loans to Sears' vendors again is worthy of a sigh of relief from investors.

Now what: This is hardly a huge vote of confidence in Sears -- Bloomberg cited Women's Wear Daily in noting that CIT is still focusing on Sears' financing and may require a letter of credit for all orders. On the other hand, Bloomberg also noted previous Sears comments that suggest goods financed by CIT represent less than 5% of the retailer's inventory.

So what should investors make of all of this? On balance, it's definitely good news, but I'd be hesitant to get too jubilant over this one data point.

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