WRAPUP 5-US retailers have dreary March, but shares rise

(Adds comment, updates retail index move)

By Nicole Maestri

NEW YORK, April 10 (Reuters) - An early Easter holiday, a cold, damp month and a budget-conscious consumer combined to ring up the weakest March monthly sales results for U.S. retailers in 13 years.

The tough conditions took a toll on retailers ranging from discount behemoth Wal-Mart Stores Inc (WMT.N: Quote, Profile, Research) to department store operator Kohl's Corp (KSS.N: Quote, Profile, Research) to apparel retailer Gap Inc (GPS.N: Quote, Profile, Research), which all reported monthly sales figures below Wall Street estimates.

March sales at chain stores open at least a year, or same-store sales, fell 0.5 percent, based on a preliminary tally of 37 retailers by the International Council of Shopping Centers. It was the weakest March performance since 1995.

"With consumers' wallets firmly closed and an earlier Easter, colder weather and the most difficult comparisons of the quarter for most players in place, March had all the ingredients for the weakest results in the last few years ... and it did not disappoint," Brean Murray, Carret & Co analyst Eric Beder wrote in a research note.

Despite the poor results, investors snapped up retail stocks, sending the Standard & Poor's retail index .RLX up 2.2 percent in afternoon trading after five sessions of declines.

Patricia Edwards, managing director at investment firm Wentworth, Hauser and Violich, attributed some of the gains to short covering, or traders who had been betting on declines moving to cover their positions. She also said investors were taking a bet that conditions should improve for retailers.

"They're looking through the valley of the recession to the other side," she said.