Retail stocks rose 1.6 percent Tuesday as increasing optimism that Greece would be able to work out its debt troubles outshined a bigger-than-expected drop in consumer confidence, which underscored continuing weakness in the U.S. economic recovery.
This story first appeared in the June 29, 2011 issue of WWD. Subscribe Today.
The S&P Retail Index increased 8.20 points to 526.62 as the Dow Jones Industrial Average advanced 1.2 percent, or 145.13 points, to 12,188.69. Nike Inc. led the way up with a 10.1 percent rise to $89.90 following stronger-than-expected fourth-quarter sales and profits, reported Monday afternoon.
Although a resolution of the latest Greek crisis would inject a good deal of certainty into the markets, investors still have to contend with mixed signals from a U.S. recovery that has proven to be much weaker than was predicted earlier this year.
On Tuesday, The Conference Board said its Consumer Confidence Index fell to 58.5 this month, down from 61.7 in May, the lowest reading for the year so far. On average, economists projected a lesser decline to 61.
Both components of the gauge of consumer sentiment fell in June with the Present Situation Index down to 37.6 from 39.3 and the Expectations Index down to 72.4 from 76.7.
“Consumers rated both current business and labor market conditions less favorably than in May, and fewer consumers than last month foresee conditions improving over the next six months,” said Lynn Franco, director of The Conference Board Consumer Research Center.
Consumers remained pessimistic about the outlook for the job market over the next six months. Those who expect more jobs ahead decreased to 14.2 percent from 16.7 percent, while those who anticipate fewer jobs remained at 20.3 percent.
Washington is trying to change that dynamic. The White House and Capitol Hill lawmakers struck a deal Tuesday to advance trade agreements with South Korea, Panama and Colombia.