The Dow Jones Industrial Average slunk back below 10,000 Tuesday and retail stocks fell 3.8 percent, surrendering the 400 mark, as general economic concerns and a sharp drop in consumer confidence fueled a global sell-off.
The Conference Board’s Consumer Confidence Index slipped to 52.9 from 62.7 in May as shoppers reported feeling less bullish in their current economic situations and their future outlooks. Rather than a nearly 10-point drop, economists expected the index to post its fourth consecutive monthly gain.
The Present Situation Index fell to 25.5 from 29.8 last month, while the Expectations Index retreated to 71.2 from 84.6. Although both figures were disappointing, the Present Situation barometer had come in at lower levels in 10 of the past 12 months, and the Expectations number had been lower in half of them.
Concerns about the labor market were evident. The percentage expecting jobs to become more plentiful in the next six months dropped to 16 from 20.2, while those expecting better business conditions fell to 17.2 from 22.8 and those who see a worse economy on the horizon rose to 14.9 from 11.9. Those describing current business conditions as bad rose to 42.4 percent of the sample from 39.5 in May.
“Until the pace of job growth picks up, consumer confidence is not likely to pick up,” said Lynn Franco, director of The Conference Board’s Consumer Research Center.
Leading equities down, the S&P Retail Index fell 15.19 points to 388.28, trading below 400 for the first time since February. Among the fashion firms on the wane were Jones Apparel Group Inc., down 7 percent to $15.90; Nordstrom Inc., 7 percent to $32.51; Phillips-Van Heusen Corp., 6.7 percent to $45.75, and Tiffany & Co., 5.7 percent to $38.58.
The Dow tumbled 2.7 percent, or 268.22 points, to 9,870.30. Blue-chip stocks are still well ahead of their recession nadir of below 6,500. But the shaky U.S. recovery, Europe’s sovereign debt troubles and general economic concerns have pushed the market down more than 1,400 points since April.
“I don’t think the Dow necessarily reflects the consumer, but the market does respond to headlines obviously, so every day or every week there’s a different direction,” said Allen Questrom, former chief executive officer of J.C. Penney Co. Inc., Federated, Barneys New York and Neiman Marcus Inc.
Investors have been trying to read the consumer-spending tea leaves to get a sense of the economy, which some fear is headed for another contraction, or double-dip recession.
Questrom said companies, having trimmed down during the recession, are in very good shape, but local, state and federal governments are going to be raising taxes just as consumers work to pay down debt.
“Who knows about a double dip, but I have to believe that if you don’t feel good now, you’re probably going to feel a lot worse next year,” he said.
But the retail veteran said consumers were willing to spend for innovative goods, citing strong sales of the new iPhone.
“The bad news is that it’s bad,” he said. “The good news is that, in bad times, people come up with new ideas that start the economy rolling.”
It’s also on to new things for Questrom, who said he was no longer nonexecutive chairman at Deb Shops Inc., a job he took when Lee Equity Partners acquired the firm in 2007. “I haven’t been involved with them for several months,” he said of Deb Shops. “I just wanted to step out of it.” A spokeswoman at the retailer declined to comment. Questrom also left Wal-Mart Stores Inc.’s board this year.
Stock losses weren’t limited to the U.S. European investors pushed the CAC 40 down 4 percent to 3,432.99 in Paris; the DAX slid 3.3 percent to 5,952.03 in Frankfurt, and the FTSE 100 fell 3.1 percent to 4,914.22 in London. The Hang Seng Index dropped 2.3 percent to 20,248.90 in Hong Kong and the Nikkei 225 fell 1.3 percent to 9,570.67.
The euro and pound were essentially flat at $1.219 and $1.506, respectively.
EXCLUSIVE: @tomford is opening its first-ever beauty store. The boutique, which opens November 20 in London’s Covent Gardens, was designed with the over-the-top glam Ford is known for. Read the full story on WWD.com, link in bio. #wwdbeauty #wwdnews (📷: Simon Wagner) #TomFordBeauty
New York-based DJ @harleyvnewton threw a party to celebrate the holiday collection of her dress and pajama line @hvn at the Ladurée Beverly Hills. It Girls @katebosworth, @rashidajones and more joined in on the fun, which included cocktails, croque monsieur sandwiches and a photo booth. #wwdfashion (📷: Owen Kolasinski/BFA.com)
For the holidays, @Burberry partnered with 20-year-old artist @blondeymccoy on a series of three outdoor murals in downtown Manhattan. The murals are McCoy’s interpretation of a Christmas eve party, the idea of charity and the spirit of family. His third mural, pictured here, is the most personal. The image depicts McCoy’s grandparents and father in London’s Trafalgar Square in the Seventies. “My work often features lots of sentimental objects.” #wwdeye
For spring 2018, designers applied bold colors and cartoonish motifs on everything from sneakers and belts to key chains. See all the top men’s accessories trends on WWD.com. #wwdtrends (📷: George Chinsee; Prop Styling by @rnasti; Market Editor: @luiscampuzano)
The @dior-sponsored @guggenheim international gala pre-party has a history of drawing cool-girl musical acts to serenade the crowd –– and last night was no exception. @haimtheband performed songs both new and old, and lured a star-studded audience with the likes of Rebecca Hall, Kate Mara, Mamoudou Athie and more. #wwdeye (📷: @lexieblacklock)
In a partnership between the @metopera and the @englishnationalopera, “Marnie” was born. The opera, with costumes sponsored by @mrporterlive, is an adaptation of the 1961 thriller by Winston Graham. Arianne Phillips, who created the costumes, is no rookie: She’s styled Madonna for her tours and created costumes for a myriad of films in the past. Read WWD’s interview with Phillips, where she talks about her inspiration for the opera’s costumes on WWD.com #wwdfashion
@barneysnyc took a different approach to their holiday windows this year. Instead of Christmas decor, Barneys tapped @thehaasbrothers to tell a story of positivity, gratitude and inclusivity via heartwarming silliness and humor. “It’s about kids and it’s about coming together and being family and loving each other,” said Simon Haas. #wwdfashion (📷: @joshuascottphoto)
Beauty influencer @kandeejohnson makes her foray into hair care with a collaboration with @ogx_beauty — making it the first time that OGX has teamed up for a product creation. The collab includes shampoos and conditioners in three scents. At 39 and a mom, Johnson is a different profile than the emerging social media stars, but is considered one of the pioneers of the digital beauty influencer world. Read WWD’s interview with her on wwd.com, including the strangest beauty product she’s ever tried #wwdbeauty