Stock markets retreated today as Wal-Mart’s Stores Inc.’s third-quarter sales fell short of expectations, weekly jobless claims spiked and Europe sunk into recession.
The S&P 500 Retailing Industry Group was just barely ahead in the final minutes of trading, up 0.20 points to 635.10, and the Dow Jones Industrial Average was off 0.2 percent, or 20.86 points, to 12,550.09.
Wal-Mart, a component of the Dow but not the retail index, said its third-quarter revenues came in at $113.93 billion — below the $114.95 billion analysts estimated. That helped push the stock down 3.5 percent to $68.80 and, given Wal-Mart’s size, weighed on the market overall.
Other retail decliners included The Bon-Ton Stores Inc., which posted narrower third-quarter losses, but saw its stock slip 5.9 percent to $10.29; Urban Outfitters Inc., down 3.8 percent to $34.82, and American Eagle Outfitters, off 2.4 percent to $18.87.
Investors are still trying to gauge the lingering impact of Hurricane Sandy and the consumer reaction to Washington’s debate over the fiscal cliff, a potentially toxic combination of automatic tax increases and spending cuts.
Initial jobless claims jumped 78,000 last week to 439,000, well ahead of the 369,000 economists projected. Part of the increase was attributed to Sandy.
In European stock markets closed down as the euro zone officially slipped into recession. According to Eurostat, the euro zone returned to recession in the third quarter ended Sept. 30. The economy across 17 nations shrank 0.1 percent, after contracting 0.2 percent in the second quarter.
A recession is usually defined as two consecutive quarters of contraction.
The DAX in Frankfurt and London’s FTSE 100 suffered the day’s biggest losses, both dropping 0.8 percent to 7,043.42 and 5,677.75 respectively. The FTSE MIB in Milan dipped 0.6 percent to 15,162.82, while the CAC 40 in Paris edged down 0.5 percent to 3,382.40.
Retail and luxury stocks were mostly down, with the day’s biggest decliners including Hennes & Mauritz, which fell 3 percent to 213.10 Swedish krona following news that same-store sales in October decreased 5 percent; Mulberry Group, down 2.6 percent to 10.42 pounds; Marks & Spencer Group, 2.1 percent to 37.06 pounds; Compagnie Financière Richemont, 1.9 percent to 64.40 Swiss francs; and PPR, 1.5 percent to 133.50 euros.
The few stocks that gained ground included Asos, up 2.3 percent to 22.32 pounds; French Connection, 4.3 percent to 0.25 pounds, and Luxottica, 0.3 percent to 29.70 euros.
The euro traded at $1.27 versus the dollar, the pound was valued at $1.59, the Swedish krona was worth 15 cents and the Swiss franc traded at $1.06.
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
@prada is introducing a new project at its men’s fall 2018 show this Sunday: “Prada Invites.” The fashion house invited four celebrated creative minds – @ronanaerwanbouroullec, Konstantin Grcic, @herzogdemeuron and @rem.koolhaas – to each create a unique item with its iconic nylon material. The designs will be unveiled on the runway show, which will take place at the company’s warehouse in Viale Ortles 25. #wwdfashion #mfwm (📷: @martinocarrera)
@kering_official is spinning off its stake in puma in an effort to focus on its luxury brands, the brand operator announced yesterday. “We are proud to have supported the turnaround of Puma, which now has unrivaled capabilities to take full advantage of the specific dynamics of its global markets and is poised to achieve substantial growth,” said François-Henri Pinault, Kering’s chief executive officer and chairman. Artémis will become a “long-term strategic shareholder” of Puma with a 29 percent stake. #wwdnews #wwdfashion (📷: @jilliansollazzo)
The fashion world mourns for celebrated street style photographer, Nabile Quenum, who died at age 32 in Paris.
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
@verwanggang and @maisonladuree have teamed up on a dessert collab called Vera Wang Pour Ladurée. The collection, which launched this week, features a specialty macaroon, as well as a wedding cake inspired by one of the designer’s gowns. “I could not imagine a more delicate or sophisticated creation to grace any couple’s celebration,” said Wang. #wwdfashion