Sector Snap: Specialty apparel

Most specialty apparel retailers report October sales in stores open at least one year, a key retail metric known as same-store sales, on Thursday.

"We expect continued deceleration of sales trends in October as negative financial news headlines, job losses, and reduced credit more than offset lower gas prices," wrote Jefferies & Co. analyst Randal Konik in a note to investors on Tuesday.

Jefferies said there is "no rush" to own shares of the specialty apparel retail group broadly, since the sector still has a fundamentally weak outlook.

However, he continues to recommend Urban Outfitters Inc. and American Eagle Outfitters Inc. as the top picks in the sector.

While Urban Outfitters offers "a differentiated shopping experience and fashion-forward product," America Eagle's sales trends are negative "but are improving relative to its prior trend versus peers," Konik wrote.

Meanwhile, he said investors should avoid Abercrombie & Fitch Inc. due to continued weak sales trends.

Shares fluctuated across the sector.

Urban Outfitters shares rose $1.27, or 6.1 percent, to $22.18.

American Eagle Outfitters shares fell 33 cents, or 3 percent, to $10.58.