Why Are Dollar Store Stocks Rallying?

In a press release issued Friday after the market close, Family Dollar Stores (NYSE: FDO) issued a statement regarding Icahn Capital LP's 13D filling with the SEC in which it reported acquiring ~9.4 percent of Family Dollar's common stock.

"The Family Dollar Board of Directors and management team are open to dialogue with all shareholders and welcome input toward the shared goal of enhancing value. As previously announced, we are taking steps to strengthen our value proposition, increase operational efficiencies and improve financial performance. We are committed to driving value for all Family Dollar shareholders and will continue to take actions to achieve this important objective."

Traders have come out bullish on this news in Monday's pre-market and have sent shares of Family Dollar up over 12 percent.

The news appears to be helping other retailers in the sector as well. Shares of Dollar General (NYSE: DG) are up over seven percent, and Dollar Tree's (NASDAQ: DLTR) shares are up almost four percent.