By and  on March 21, 2012

Weak home sales were enough to drag down Wall Street today, but U.S. retail stocks continued to hit new highs.

The S&P Retail Index rose 0.5 percent, or 2.77 points, to 616.40 — the best close on record. U.S. retail stocks, which are up 17.8 percent so far this year, have been gaining on hopes thatconsumer spending will continue to strengthen along with the job market.

Winning retailers included Macy's Inc., which rose 1.9 percent to $40.47 after the retailer laid out a plan to cater to younger shoppers; Limited Brands Inc., 1.9 percent to $48.14; Quiksilver, Inc., 1.8 percent to $4.49, and Lululemon Athletica Inc., up 1.6 percent to $74.07 ahead of its quarterly earnings report Thursday.

The Dow Jones Industrial Average slipped 0.4 percent, or 45.57 points, to 13,124.62 with the housing market coming to the fore.

Existing-home sales in the U.S. fell 0.9 percent in February to an annual rate of 4.59 million, down from an upwardly revised 4.63 million in January, according to the National Association of Realtors.

Across the Atlantic, London's FTSE 100 edged up 0.01 percent to close at 5,891.95 after UK Chancellor of the Exchequer George Osborne unveiled a decidedly pro-business budget for 2012.Osborne slashed the controversial 50 percent tax rate for high earners to 45 percent, raised the minimum threshold at which taxes kick in, and said the corporation tax would fall progressively to 22 percent from 26 percent by 2014.

He also said that UK borrowing would be 1 billion pounds less than had been forecast in the fall, and that the economy would grow 0.8 percent in 2012, compared with the 0.7 percent originally projected.

By 2014, the UK economy is expected to grow by 2.7 percent. That figure will rise to 3 percent in 2015 and 2016.

Frankfurt's DAX also rose, gaining 0.2 percent to 7,071.32.

But the CAC 40 in Paris fell 0.1 percent to 3,527.37, while the FTSE MIB in Milan sank 1.3 percent to 16,734.75.

Luxury and retail stocks were on the upswing, with many of the day’s biggest gainers in the UK.They included Marks & Spencer Group, which rose 2.5 percent to 3.90 pounds; Mulberry Group, 1.8 percent to 19.53 pounds, and, which advanced 1.4 percent to 17.65 pounds.

PPR, which named Jochen Zeitz to its board of directors, rose 1.6 percent to 134.50 euros, while Tod’s climbed 1 percent to 84.32 euros.

The euro traded at $1.32, while the pound traded at $1.59.

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