Retail Losers: GameStop, Barnes & Noble

NEW YORK (TheStreet) -- Improving retail sales and a more upbeat holiday outlook could not calm investors fears after disappointing housing and wholesale price data.

Retail sales for the week ended Oct. 17 inched up 0.2%, according to the International Council of Shopping Centers and Goldman Sachs. And on a year-over-year basis retail sales jumped 2.8%, its biggest gain since August 2008.

The ICSC expects October same-store sales to be flat, with upside potential.

This bodes well for the upcoming holiday shopping season and this merriment continued with new holiday forecast from ShopperTrak.

The retail research firm predicts holiday sales will rise 1.6% over last year and a 4.2% jump in foot traffic.

This is better than other holiday outlooks, most of which saw sales being either flat or up or down 1%.

But this good news was overshadowed by a smaller-than-expected jump in housing starts and a decline in permits, sending the S&P Retail Index down 1.8% to 390.47.

Shares of GameStop(GME Quote) are plunging 7.6% to $26.03 after an analyst downgraded the video-game retailer to neutral from buy on disappointing September sales in the industry.

On Monday, NPD Group reported that video game sales inched up 1% to $1.27 billion, its first increase in six months, but still well below analysts' expectations.

Barnes & Noble(BKS Quote), meanwhile, is tanking 5.8% to $18.91, despite the expected launch today of its highly anticipated e-reader, which could compete with Amazon.com (AMZN Quote)'s Kindle.

Best Buy(BBY Quote) is off 3.6% to $39.39, even after the electronic retailer said it is teaming with Netflix(NFLX Quote) to stream movies and television episodes over the Internet that will be available for viewing through its Insignia Blu-ray Disc Players.