NEW YORK — Disappointing earnings reports and deepening concerns over economic growth and inflationary prices resulted in the year’s worst week of trading.

In turn, the WWD Composite Stock Index plunged 4.16 percent over the week to close at 1,077.67 from 1,124.47 the prior week. This is the worst performance of the index in five weeks.

The S&P 500 fared no better, plummeting 3.4 percent to close at 1,142.83. The S&P Retail Index also declined 3.2 percent from last week.

Meanwhile, the buzz over retail mergers and acquisitions continued during the week, and several of the potential target companies watched their stock prices slide.

Shares of Neiman Marcus, the most imminent potential deal, dropped 35 cents, or 0.4 percent, to close at $92.55 on Friday, from $92.90 on April 8.

Buyers are flush with cash and interest rates remain near historical lows, said Citigroup Smith Barney analyst Deborah L. Weinswig in a research note.

“From a retailer’s perspective, longer-term growth prospects are limited and companies are seeking opportunities to unlock value,” she said.

Shares for J.C. Penney, previously reported as a leveraged buyout target, dropped 6.97 percent to close at $45.49 on Friday, from $48.90 on April 8. The company has its Analyst Meeting on Tuesday and Wednesday at its Plano, Tex., office.

Even with concerns over a possible slowdown in the economy, the potential for the deals remain high. “We anticipate private equity, real estate, and retail firms to team up in consortiums to share in the investment and risk of acquisitions,” said Weinswig.

In fact, a consortium led by Singapore’s OSIM International acquired specialty retailer Brookstone Inc., the latest U.S. retailer to change hands, on Friday by for about $445 million. Shares of Brookstone surged 27.31 percent to close at $19.86 on Friday.

Analysts still think declining gasoline and food prices will allow consumers to shift spending from staples to more discretionary items.

“We are keeping our eye on gas prices and interest rates,” said Weinswig.

This story first appeared in the April 18, 2005 issue of WWD.  Subscribe Today.

Weekly % Changes Ending April 15
Largest Gainers
Largest Losers
  Close Change   Close Change
Mossimo 4.21 25.18
36.15 -13.50

True Religion

13.05 4.07
Chico’s FAS
24.81 -13.13
Burlingon Coat 28.02 3.28
Deb Shops
25.51 -11.67
Inter Parfums 14.46 2.48
26.30 -10.57
CVS 51.86 0.41
American Eagle
26.88 -9.83