Concerns about the financial sector, and even about the continuing decline in crude oil prices, on Tuesday dampened the market rally that was ignited by the government bailout of Fannie Mae and Freddie Mac. Major indices dropped more than 2 percent on Tuesday. With Lehman Brothers Holdings down 45 percent on fears that the bank might be running out of financing options, the Dow Jones Industrial Average shed 280 points, or 2.4 percent, to end the session at 11,230.73. The Standard & Poor’s 500 Index dropped 3.4 percent, while the S&P Retail Index declined a slightly more manageable 3.2 percent. Among retailers hard hit by the markets’ retreat were Retail Ventures, down 9.8 percent after reporting weaker second-quarter earnings late Monday; Dillard’s, down 9.3 percent; Tween Brands, down 7.9 percent, and American Apparel, down 7.3 percent. Talbots’ shares registered a 4.6 percent advance for the day, and Mothers Work and Christopher & Banks had gains of 4 and 3.1 percent, respectively. European stocks also fell back, with Inditex Group, down 6.6 percent, taking the worst hit. Other declines were smaller, and a few firms — Tod’s (up 4.3 percent), Burberry (up 2 percent) and IT Holding (up 1.6 percent) among them — managed to break into positive territory.
This story first appeared in the September 10, 2008 issue of WWD. Subscribe Today.
* Editor’s note: European stocks are quoted in the currency of their principal exchanges. Shares on the London Stock Exchange are quoted in pence, Richemont and The Swatch Group are quoted in Swiss francs and Hennes & Mauritz is quoted in Swedish kronor. All other European stocks are in euros.