By and  on January 30, 2012

Retail stocks were in retreat today as Wall Street stalled — looking ahead to an update on January unemployment Friday — and European markets languished as the region's leaders met in Brussels and Greece continued its standoff with creditors.

The S&P Retail Index was down 0.6 percent, or 3.09 points, to 554.92 and the Dow Jones Industrial Average slipped 0.2 percent, or 28.65 points, to 12,631.81 as the close approached.Among the retail decliners were New York & Co. Inc., down 11.2 percent to $2.79; Pacific Sunwear of California Inc., 5.9 percent to $1.90; American Apparel Inc., 5.5 percent to 76 cents; Charming Shoppes Inc., 3.7 percent to $4.76, and Dillard's Inc., 2.5 percent to $45.

Economists expect the unemployment rate will inch back up to 8.6 percent on Friday after falling to 8.5 percent in December. Investors are looking for a sign that the economy will continue to strengthen even as Europe appears to descend into recession.

Europe’s major stock markets closed in negative territory after France cut its growth forecast in half —to 0.5 percent—and the economic worries in the Euro zone were the focus of a summit in Brussels on today.

The recent credit downgrades of Italy, Spain and Belgium also made for a gloomy start to the week.

Paris' CAC 40 led the downward slide, falling 1.6 percent to 3,265.64, while the Milan's FTSE MIB retreated 1.2 percent to 15,753.14. The FTSE 100 in London sank 1.1 percent to 5,671.09, while the DAX in Frankfurt tumbled 1 percent to 6,444.45.

Retail and luxury stocks were, for the most part, down with the exception of Benetton Group, which soared 13.1 percent to 3.71 euros, ahead of an announcement on Tuesday of 2011 company highlights.

Among the stocks that lost the most were Burberry Group, which fell 2.1 percent to 13.26 pounds; Carrefour, which tumbled 4.1 percent to 17.51 euros following the appointment of a new chief executive, Georges Plassat, and Italian eyewear maker Safilo Group, which sank 4.6 percent to 5.10 euros.

The euro traded at $1.31, while the pound traded at $1.57.

Last week, debt watchdog Fitch Ratings downgraded Italy, Spain, Belgium, Slovenia and Cyprus on a worsening economic outlook across the Euro zone.

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