With stores tripping over themselves to offer steep holiday season discounts, their efforts were largely in vain, as many consumers simply weren’t financially able to take full advantage. Even the beast that is Wal-Mart (NYSE: WMT) struggled to make much headway. As we reported yesterday, Thomson-Reuters projected a 2.8% same-store sales rise for the firm in December. But the actual results proved otherwise.

Considered to be a beneficiary of the tightened household budgets, the company reported a paltry 1.7% increase in same-store sales. As a result, it cut its earnings outlook.

Thomson-Reuters was right about one thing, though: Higher-end retailers got spanked - some of them quite dramatically. For example, Saks (NYSE: SKS) posted a 20% decline in same-store sales, while Gap (NYSE: GPS) sales sank by 14%.

So how can investors play this? If you’re like me, when bad news hits, you look to snap up quality companies on the cheap. But retail stocks are just too dangerous right now. While taking the opposite approach of the main sentiment often pays off, I expect retail to head lower for the next few months.

If you’re looking for bargains, buy the retailers’ goods, not their stocks.

A New Cold War

No progress.

That’s the verdict from the latest round of talks aimed at solving the increasing crisis over Russia’s decision to cut off gas supplies to the Ukraine - one that is affecting gas supplies throughout Europe in the depths of winter.

European Union officials, plus those from Russia and the Ukraine were set for more negotiation in Brussels today, but those talks were cancelled, despite a meeting between Russia’s Gazprom CEO Alexei Miller and Oleg Dubyna of Ukrainian firm Naftogaz in Moscow on Wednesday evening.

The dispute stems from a disagreement over prices, contracts, unpaid bills from the Ukraine to Russia in 2008, and Russia’s accusations that the Ukraine has stolen gas from pipelines that pass through the country. And as tensions have risen, Russia shut the taps off a week ago - a move that has resulted in some EU nations (mostly in eastern and central Europe) seeing their gas supplies dramatically curtailed, or cut off entirely, because Russia accounts for about 25% of EU gas supplies - 80% of which are pumped through the Ukraine, according to the BBC.

Countries not receiving any gas at all from the Ukraine include the Czech Republic, Romania, Greece, Austria, Bulgaria, Hungary and Croatia.

Flash back two years and you’ll find a mirror image of the situation today, when Gazprom and Ukraine battled over gas supplies and caused shortages in several EU nations.

This dispute will eventually be resolved, but with much of the EU in the midst of a brutal cold spell, it can’t come soon enough. Meantime, Gazprom has vowed to pump extra supplies to the EU through other non-Ukrainian pipelines.

Source: Retailers Battle Sales Slump… Bank Of England Battles Recession… Russia And Ukraine Battle Each Other