Consumer sentiment fell for the second straight month in July, providing a bad omen for the back-to-school selling season and battering retail stocks, which broke a three-day winning streak with a 1.9 percent decline.
The Conference Board’s Consumer Confidence Index dropped to 50.4 for July, down from 54.3 in June and 62.7 in May. Economists were expecting the research group’s monthly reading of the index to show a milder decline, to 51. The July mark is slightly below the 50.6 registered eight months ago, in November 2009.
Shoppers were more negative in their take on current economic conditions and in their outlook.
“Consumer confidence faded further in July, as consumers continue to grow increasingly more pessimistic about the short-term outlook,” said Lynn Franco, director of the group’s Consumer Research Center. “Concerns about business conditions and the labor market are casting a dark cloud over consumers that is not likely to lift until the job market improves. Given consumers’ heightened level of anxiety, along with their pessimistic income outlook and lackluster job growth, retailers are very likely to face a challenging back-to-school season.”
The Present Situation Index fell to 26.1, from 26.8 in June, and the Expectations Index pulled back to 66.6 from 72.7 a month ago.
The survey found that 43.6 percent of shoppers saw conditions as “bad,” an increase from 41 percent.
Investors caught a bit of that vibe, too, and drove the S&P Retail Index down 7.96 points to 407.72. Stretching its string of advances to four, the Dow Jones Industrial Average perked up 0.1 percent, or 12.26 points, to 10,537.69
Among the retailers weathering declines Tuesday were Chico’s FAS Inc., down 9.1 percent to $9.40; Guess Inc., 6.1 percent to $36.20; AnnTaylor Stores Corp., 5 percent to $16.87; Urban Outfitters Inc., 4.8 percent to $32.97; Gap Inc., 3.9 percent to $18.29, and J. Crew Group Inc., 3.9 percent to $35.69.
Shares of The Bon-Ton Stores Inc. fell 3.1 percent to $9.53 after gaining 23 percent over the previous two trading sessions.
European investors pushed up the CAC 40 0.8 percent Tuesday to 3,666.40 in Paris, as the FTSE 100 gained 0.3 percent to 5,365.67 in London and the DAX gained 0.2 percent to 6,207.31 in Frankfurt.
Asian stocks were mixed, with the Hang Seng Index up 0.6 percent to 20,973.39 in Hong Kong and the Nikkei 225 down 0.1 percent to 9,496.85 in Tokyo.
Harrods plans to remove the famous statue of Princess Diana and Dodi Al Fayed from the bottom of the Egyptian escalators and hand it back to Mohamed Al-Fayed. “We are very proud to have played our role in celebrating the lives of Diana, Princess of Wales and Dodi Al Fayed at Harrods and to have welcomed people from around the world to visit the memorial for the past 20 years,” said Michael Ward, Harrods managing director. “With the announcement of the new official memorial statue to Diana, Princess of Wales at Kensington Palace, we feel that the time is right to return this memorial to Mr. Al Fayed and for the public to be invited to pay their respects at the palace.” More on the news, with reporting by @loreleimarfil, at WWD.com. #wwdnews
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Quenum, creator of the fashion blog “J’ai Perdu Ma Veste,” was a fashion week fixture, and regularly shot for New York magazine’s The Cut, among other outlets, and brands such as Louis Vuitton, Moncler and Adidas. He was also actively involved in the #NoFreePhotos initiative, which kicked off in the fall. Read more about Quenum in @kbsmoke's story on WWD.com. #wwdnews
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