A positive Beige Book report from the Federal Reserve lifted stocks late Wednesday, but retail shares failed to advance.
The S&P 500 Retailing Industry Group pulled back 0.2 percent to 919.28, shaking off a deeper decline earlier in the day. The Dow Jones Industrial Average enjoyed a second consecutive triple-digit gain, adding 108.08 points, or 0.7 percent, to end the session at 16,481.94, while the S&P 500 moved ahead 0.5 percent to 1,848.38.
Equities picked up steam in the late afternoon after the Fed, in its monthly Beige Book report, showed healthy economic momentum, with nine of its 12 districts describing growth as moderate.
Among retail, fashion and beauty stocks tracked by WWD, the largest decline of the day was registered by Birks Group Inc., shares of which declined 18 percent, to $1.31, following its report late Tuesday of a decline in its net sales for its third quarter, which ended last month, and same-store sales for the quarter and November-December holiday period.
The second largest decline among the WWD sample came from Cache Inc., with a far more modest sell-off of 4.5 percent, to $5.35, for the day.
Shares of Aéropostale Inc. opened up 6.2 percent, at $8.21, but gave back most of the gains over the course of the day and closed ahead 0.7 percent at $7.78. Speculation swirled around the embattled teen retailer early in the day that it might be engaged in talks with private equity players regarding a possible sale but quieted in the afternoon. Sycamore Partners has an 8 percent stake in the retailer and Hirzel Capital Management owns 6 percent of the stock. Additionally, activist shareholder Crescendo Partners last year said it had a stake and pushed the New York-based retailer to explore a sale, prompting the retailer to adopt a poison pill last November.
Stifel Nicolaus analyst Richard Jaffe rated the chances of a sale at “better than 50 percent” and speculated that a takeout could bring a premium of 20 percent to shares’ closing price of $7.73 on Tuesday, or about $9.35 a share.
Among the fashion companies gaining ground Wednesday were Oxford Industries Inc., up 4.7 percent to $80.16; Sears Holdings Corp., up 2.9 percent to $36.70, and Express Inc., up 2.1 percent to $18.76.
J.C. Penney Co. Inc. disclosed its plans to close 33 stores before midyear after the markets closed. Shares rose 1.2 percent to $7.01 prior to the announcement.
Europe’s indices all registered strong gains, led by a 2 percent spurt, to 9,733.81, by the DAX in Frankfurt.
The CAC 40 in Paris was up 1.4 percent to 4,332.07 and the FTSE MIB in Milan up 1.6 percent to 20,045.76, while the FTSE 100 in London gained 0.8 percent to 6,819.86.
Boosting investor confidence, the World Bank predicted growth above 5 percent for developing countries’ economies in 2014 and global GDP growth of 3.2 percent during the year.
Fashion, luxury and retail stocks had a mixed day.
Burberry was up 4.6 percent to 15.37 pounds and was among the FTSE 100’s top five performers after reporting strong third-quarter revenues Wednesday. The London-based luxury label said that its retail sales rose 14 percent to 528 million pounds, or about $856 million, in the three months ended Dec. 31. Comparable sales rose 12 percent at constant exchange.
Mulberry also gained, rising 3.8 percent to 9.41 pounds, while LVMH Moët Hennessy Louis Vuitton rose 1.9 percent to 128.70 euros.
Losing value were Unilever, down 1.1 percent to 28.26 euros; Aeffe, down 0.6 percent to 0.86 euros, and Brunello Cucinelli, which fell 0.4 percent to 22.68 euros.
The pound traded for $1.64 against the U.S. dollar, while the euro changed hands for $1.37.