Don't Mind the Gap: Rally Fails to Persuade Retail Skeptics

Gap (GPS Quote), not usually the most fashion-forward of retailers, has been a trendsetter the last couple days.

Uptick Gap's Wednesday rally

The parent of Gap, Old Navy and Banana Republic has seen its stock rise the last two days, dragging other retailers along with it, to the tune of Wednesday's 2.6% gain in the S&P Retail Index. Wednesday Gap stock posted a 13% gain, to $21.75, and Thursday it added $1.38, or 6.4%, to $22.88. The reason? A positive note from Merrill Lynch's Mark Friedman, bumping up his rating on Gap two notches, to intermediate-term buy from neutral, citing an impressive lineup of holiday merchandise at the main Gap brand stores. (Merrill hasn't done recent underwriting for the Gap.) ...