NEW YORK — Retail shares outpaced the greater market’s rally Tuesday, though there was little to indicate the sector’s fundamentals were improving.
This story first appeared in the October 16, 2002 issue of WWD. Subscribe Today.
The Standard & Poor’s retail index shot up 5.4 percent, or 14.85 points, to 290.25, while the broader S&P 500 was up 4.7 percent, or 39.82 points, to 881.26.
Fueled by better-than-expected quarterly results from General Motors, Citigroup and Johnson & Johnson, the Dow Jones Industrial Average climbed 4.8 percent, or 378.28 points, to 8,255.68. The Nasdaq surged 5.1 percent, or 61.91 points, to 1,282.44.
WR Hambrecht & Co. analyst Bill Dreher described the retail run-up as “more of a technical rally. The fundamentals have not changed.”
As the holiday season approaches, Dreher said, “We expect a return to some of the more fundamental issues of slowing sales, additional expenses and a strong likelihood of [fourth-quarter] earnings estimate reductions, which are going to weigh on the stocks.” Echoes of the West Coast port closure that ended last week, he said, will create the bulk of these additional expenses.
Midwest Research’s Jeff Stinson added that shares of many of the apparel retailers probably have “a little bit extra to make up for,” as they have been among the hardest hit in the market’s recent depressions.
Department stores making up lost ground included Sears Roebuck, increasing 8.1 percent to $36.39; Federated Department Stores, 7.4 percent to $31.55; Kohl’s, 6.2 percent to $58.60; J.C. Penney, 6.1 percent to $17.55; Dillard’s, 6 percent to $18.99; Saks Inc., 5.8 percent to $10.84; May Department Stores Co., 5.5 percent to $24.35, and Nordstrom, 5.1 percent to $19.30.
Among discounters, shares of Target were up 6.8 percent to $32.09 while Wal-Mart’s stock rose 4 percent to $56.29.
Specialty players getting lifts in their market cap included American Eagle, up 14.1 percent to $14.05; Aeropostale, 13.1 percent to $9.05; Abercrombie, 11.5 percent to $18.70; Pacific Sunwear, 9.7 percent to $20.95; Sports Authority, 9.6 percent to $5.85; Charlotte Russe, 9 percent to $9.49; Urban Outfitters, 8.1 percent to $22.96; Wet Seal, 7.9 percent to $10.68; Bebe, 7.2 percent to $13.93; Mother’s Work, 7.1 percent to $35.84; Chico’s FAS, 6 percent to $19; Charming Shoppes, 5.9 percent to $5; Talbots, 5.8 percent to $25.49; Too, 5.7 percent to $23.88, and Limited Brands, 5.4 percent to $15.30.