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Fossil Leads Fashion Stocks

Watchmaker posts its biggest jump ever posting better quarterly results.

Retail stocks outperformed on Wall Street today with Fossil Inc., Tumi Holdings Inc. and Warnaco Group Inc. all enjoying big gains after their quarterly earnings reports.

 

Shares of Fossil posted their biggest jump ever, rallying 31.5 percent to $91.77 after the accessories firm posted better-than-expected second-quarter earnings. The company was propelled by strong watch sales and earnings of 92 cents a share, which were 14 cents better than analysts projected.

 

Shares of Movado Group Inc. benefited from Fossil’s big day, rising 13.5 percent to $25.78.

 

Also on the move were Tumi Holdings Inc., which rose 23.1 percent to $22.78 after the firm reported better second-quarter sales on Monday, and Warnaco Group Inc., which jumped 11.6 percent to $47.50 after the company pointed to signs of stabilization in its European business.

 

Overall, the S&P Retail Index increased 1 percent, or 6.53 points, to 632.80 as the Dow Jones Industrial Average picked up 0.4 percent, or 51.09 points, to 13,168.60. The S&P 500 gained 0.5 percent, or 7.12 points, to close at 1,401.35 — its first close above 1,400 since early May.

 

In Europe, markets logged gains against a backdrop of deepening recession in Italy and shrinking industrial output in the U.K.

 

The FTSE MIB in Milan was up 2.2 percent to 14,655.64, followed by the CAC 40 in Paris, which climbed 1.5 percent to 3,453.28. The DAX in Frankfurt advanced 0.7 percent to 6,967.95, while the FTSE 100 in London rose 0.6 percent to 5,841.24.

 

Retail and luxury stocks were mostly up, with the day’s biggest gainers including Brunello Cucinelli, ahead 5.1 percent to 11.82 euros; Carrefour, 3.1 percent to 16.09 euros; Ferragamo, 2.4 percent to 17.16 euros, and LVMH Moët Hennessy Louis Vuitton, 1.6 percent to 132.25 euros.

 

The euro traded at $1.24 while the pound traded at $1.56.

 

In Italy, the economy shrank 0.7 percent in the second quarter compared with the first quarter. It was the fourth consecutive quarter of economic contraction. Year-on-year, the economy shrank by 2.5 percent, according to Istat, the Institute of Italian statistics.

 

In the U.K., industrial output fell 2.5 percent in June, which was better than the 3.5 percent economists projected.