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Major Indices Reach 2004 Lows

NEW YORK — The <B>WWD Composite Stock Index</B> fell to its lowest level in 2004, plunging 5 percent to 1,013.12 from 1,066.39 a week ago, as ominous economic reports and terrorist threats pushed the three major indices to new lows for the...

NEW YORK — The WWD Composite Stock Index fell to its lowest level in 2004, plunging 5 percent to 1,013.12 from 1,066.39 a week ago, as ominous economic reports and terrorist threats pushed the three major indices to new lows for the year.

For the week, the S&P 500 retreated 3.4 percent to 1,063.97, the Dow Jones Industrial Average fell 3.2 percent to 9,815.33 and the Nasdaq dropped 5.9 percent to close at 1,776.89.

The sell-off was fueled by a series of economic reports: Consumer spending declined 0.7 percent in June; oil prices eclipsed 21-year highs by flirting with $45 a barrel, and on Friday the Labor Department said the economy added just 32,000 jobs in July, the lowest number since December. Analysts had forecast an average of 231,000 new jobs.

Adding to those woes, overall July same-store sales gains were lackluster, rising just 2.6 percent for shops open at least a year, as stalwarts such as Gap Inc., May Department Stores Co. and Ross Stores Inc. reported declines.

Those numbers made Polo Ralph Lauren Corp.’s stock stand out in sharp contrast. Its shares advanced 3.1 percent to $33.99 from $32.96 a week ago, after the company said first-quarter profits shot up 165.1 percent on a 24.1 percent sales gain. Chief executive officer Ralph Lauren credited the boost to outstanding results from the company’s retail stores and a “phenomenal response” to its luxury designs.

Investors were not enamored with Coach Inc., however. Although the company also delivered first-class results, with profits more than doubling on a 46.1 percent jump in sales, Coach’s stock tumbled 12.4 percent to $37.50 from $42.79. Investors pulled back over concerns of a possible drop in consumer spending in Japan.

Investors also sold off Tommy Hilfiger Corp.’s shares, sending them down 4.3 percent to $13.40 from $14 last week, after the company swung to a first-quarter loss compared with a year-ago profit. Results were dragged down partly by a 20.3 percent decline in wholesale business.

Meanwhile, Warnaco Group Inc.’s purchase of the Ocean Pacific swim and surf brand and a return to profitability in the second quarter did not prevent investors from paring their holdings. The company’s stock fell 4.8 percent to $18 from $18.90 a week ago.

This story first appeared in the August 9, 2004 issue of WWD.  Subscribe Today.

— Dan Burrows

WWD Composite Stock Index vs. S&P 500

Source: data Networks, Standard & Poor’s