By and  on May 4, 2012

Retail stocks took a walloping in midday trading on Wall Street today as weaker-than-expected U.S. payroll gains only worsened the headache brought on by Thursday's lukewarm same-store sales reports.

At 1 p.m., the S&P Retail Index was down 1.8 percent, or 11.40 points, to 638.38, as the Dow Jones Industrial Average fell 1.2 percent, or 163.63 points, to 13,042.96.

Investors have been pushing up stocks this year on the premise that the long climb back after the recession, if maddeningly slow, was on track. That belief was based in large part on solid improvement in the employment scene.

But the economy added just 115,000 jobs last month, according to the Labor Department. Economists were looking for a brisker gain of 163,000 new jobs. April sales rose just 0.6 percent according to the International Council of Shopping Centers.

Bebe Stores Inc. took the biggest hit in retail, falling 19.9 percent to $6.44. The chain posted a $214,000 third-quarter loss and its outlook for the rest of the year disappointed. The company said fourth-quarter earnings from continuing operations would range from 2 cents to 4 cents a share — below the 9 cent profit analysts expected.

Also declining were Warnaco Group Inc., down 6.2 percent to $47.97; Guess Inc., 5.3 percent to $27.96; PVH Corp., 4.9 percent to $86.49; Michael Kors Holdings, 4.8 percent to $43.77, and Tumi Holdings Inc., 4.6 percent to $23.27.

Tilly’s Inc., the California specialty chain, was trading at $17.09 in its first day of trading. The stock reached a high of $19.29 shortly after the opening bell and is still well above the initial price of $11.50 to $13.50 the company was targeting earlier in the week.

In Europe, markets ended the week in decline as France and Greece headed into pivotal elections this weekend and April data showed a sharp downturn in output across the euro zone.

The DAX in Frankfurt sank 2 percent to 6,561.47 following Markit’s Purchasing Managers’ Index report that output in Germany hit a five-month low. The CAC 40 in Paris fell 1.9 percent to 3,161.97, also following Markit’s report of a drop in output.

The FTSE 100 in London sank 1.9 percent to 5,655.06 while the FTSE MIB in Milan fell 1.4 percent to 13,918.57.

“Business and consumer confidence appears to have deteriorated markedly across the region since the uplift seen at the start of the year, suggesting that stimulus measures implemented by the European Central Bank have not had a lasting impact on the real economy,” said Chris Williamson, chief economist at Markit.

Confidence also fell back further in April, he said.

“Little can be said to remain of any ‘core’ of strength in the region," he said. "Growth has practically ground to a halt even in Germany, and France has joined Italy and Spain in seeing a strong rate of economic decline.”

Among the retail and luxury stocks losing ground were Burberry Group, down 3.5 percent to 14.83 pounds; Yoox, 5.5 percent to 10.23 euros; Mulberry Group, 3.3 percent to 23.90 pounds, and Hugo Boss, 4.5 percent to 82.01 euros.

Among the few stocks that gained ground today was newcomer Brunello Cucinelli, which rose 1.5 percent rise to 11.16 euros.

The euro traded at $1.31 while the pound traded at $1.62.

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