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U.S. Retail Stocks Post First Gain of 2014

Investors encouraged by narrower U.S. trade deficit in November.

U.S. retail shares enjoyed their first positive day of the new year today as major indices in the U.S. and Europe logged increases.

The S&P 500 Retailing Industry Group progressed 0.4 percent to 931.08 after opening 2014 with three consecutive declines. The Dow Jones Industrial Average and S&P 500 both were up 0.6 percent, to 16,530.94 and 1,837.88, respectively.

Markets were energized by news of a lower trade deficit in November, spurred by increases in exports. Apparel and textile imports were up 5.2 percent for the month, according to the U.S. Commerce Department’s Office of Textiles and Apparel.

Among U.S. retail, fashion and beauty issues tracked by WWD, American Apparel Inc. registered the largest increase for the day, gaining 6.7 percent to $1.43. The stock has seen a nice run and increased 38.8 percent since hitting its recent low of $1.03 on Dec. 16. Zale Corp. registered the second-largest gain of the day, with shares up 3.7 percent to $15.96.

On the other side of the breakeven line, shares of Michael Kors Holdings Ltd. fell 3.8 percent to $78.94 after Citigroup analyst Oliver Chen downgraded the stock to “neutral” from “buy” based on what he viewed as a fair valuation following a “60 percent stock run in 2013.”

Shares of Twitter Inc. continued their recent roller-coaster ride with a decline of 7.3 percent to $61.46. J.C. Penney Co. Inc. was off 5.5 percent to $8.19.

One day after launching a hostile takeover bid for rival Jos. A. Bank Clothiers Inc., shares of The Men’s Wearhouse Inc. declined 0.2 percent to $51.56 while Bank’s surrendered 2.1 percent to close at $55.70. In a tender offer directed at Bank’s shareholders, Men’s Wearhouse boosted its bid to $57.50 a share, or about $1.61 billion.

In Europe, markets were buoyant following word of a larger-than-expected decline in German unemployment from the nation’s Federal Labor Agency.

Milan’s FTSE MIB led the region’s charge with a 1.2 percent climb to 19,468.75 with Frankfurt’s DAX and Paris’s CAC 40 generating 0.8 percent increases to end the trading day at 9,506.20 and 4,262.68, respectively. In London, the FTSE 100 was up 0.4 percent to 6,755.45.

Aeffe shares rose 6.8 percent to 0.90 euros while French Connection Group was up 4.5 percent to 36.59 euros, followed closely by Italia Independent Group, up 4 percent to 41 euros.

Shares of Moncler declined 2.6 percent to 15.40 euros while Swatch Group’s were off 2.3 percent to 98.85 Swiss francs.

The euro traded for $1.36 against the U.S. dollar and the Swiss franc for $1.10.