Retail sales rose in September for the first time in 13 months, fueling hopes that the worst is behind retailers that head into the holiday season better prepared for a tough economic environment.

Even as investors get more and more bullish about the outlook for the U.S. economy, the economy’s underlying foundation continues to erode.

The retail sector is all over the news. Unfortunately, the headlines are almost all negative. As unemployment risks remain high, consumers refuse to spend.

Several key second-quarter earnings reports could either validate or undercut assertions that the U.S. economy is poised for recovery.

Retail investors had a rough go of things in the first half, but since the March lows of all the markets, the Standard & Poor’s Retail Index is showing progress toward its 52-week high of 427.13.

Jobless Claims Fall; China Detains Four Rio Tinto Employees for Alleged Espionage; Retail Roughed Up in June; China Auto Sales Skyrocket; Broadcom Drops Acquisition Attempt; Mortgage Rates Fall; Madoff Won’t Appeal Sentence

Americans love to hate Wal-Mart (NYSE:WMT), but it is a retailer we would most certainly miss if it were suddenly gone. Could Obama and his market manipulators determine it is too big to fail?

Crude Rises Above $62/Barrel; Opel Courtship Down to Three; Unibanco CEO: 4% Second-Half GDP for Brazil; Target and BJ’s Beat Expectations; Obama To Sign Credit Card “Bill of Rights”; California Could Go Broke After Voters Reject Plan; Wall Street Won’t Rehire Many Workers; Indiana Pension Funds File to Block Chrysler Bankruptcy Sale

On the earnings calendar, as you can see from the ones I have listed there is a significant amount of retailers reporting this week. That’s only a partial list, here’s the rest: ANN, BJ, APP, DDS, HOTT, DKS, ARO, GPS, PSUN, NWY, ROST, and TJX.

Before I go into the Chart of the Day let me just say that even I have decided to cut my own spending. From spending ungodly amounts of money for breakfast sandwiches at Dunkin Donuts and McDonalds every morning, now I only spend a quarter as much at the Supermarket instead.