Retail stocks gained ground today as Wall Street briefly touched a five-year high and proved to be strong enough to support a rumor that accessories giant Coach Inc. could put itself on the market.
A Coach spokeswoman batted away the talk, noting, “We do not comment on speculation or rumors, particularly unsubstantiated ones.” But the report, attributed to DealReporter, was enough to push shares of Coach up as much as 5.4 percent before the stock closed up 2.8 percent at $47.82. More than 14 million shares traded hands, well above the 5.5 million daily average for the past three months.
Coach has an enterprise value of $12.3 billion, which would make any takeover an extremely big deal for the fashion industry, although low interest rates have helped make it relatively easy for big investors to borrow large sums of money cheaply, a fact that no doubt helped buttress the rumor.
The S&P 500 Retailing Industry Group gained 1.6 percent, or 10.86 points, to 703.33, as the Dow Jones Industrial Average gained 1.3 percent, or 175.24 points, to 14,075.37.
The other fashion gainers included Sears Holdings Corp.,up 4.5 percent to $47.47; Tumi Holdings Inc., 3.7 percent to $23.06; Aéropostale Inc., 3.6 percent to $13.23; Lululemon Athletica Inc., 2.7 percent to $67.72, and Nordstrom Inc., 2.6 percent to $53.90.
The Dow briefly traded as at 14,104.86 — a level not seen since 2007.
The market took a hit earlier this week when inconclusive elections in Italy sparked fears that the region’s debt crisis would flare up again. Federal Reserve chairman Ben S. Bernanke, however, helped calm nerves in Congressional testimony, standing by policies that pump money into the economy to help the recovery.
In Europe, stocks bounced back from Tuesday’s steep sell off sparked by the Italian elections. The CAC 40 in Paris led markets higher, gaining 1.9 percent to 3,691.48, and Milan’s FTSE MIB advanced 1.6 percent to 15,801.26. Frankfurt’s DAX gained 1 percent to 7,675.83, while London’s FTSE 100 0.9 percent to 6,325.88.
The euro traded at $1.31 against the dollar, while the pound was worth $1.52.
Retail and luxury stocks were mostly up, with the day’s biggest gainers including Marks & Spencer, up 2.1 percent to 3.70 pounds; Tod’s, 1.7 percent to 109 euros, and PPR, which was up 1.4 percent to 169.30 euros.
Among those losing ground were Mulberry, which dropped 1.8 percent to 13.28 pounds, and Yoox, 1.4 percent to 13.89 euros.