U.S. retail stocks overcame tepid comparable-store sales in June and rose today even as global markets refused to be cheered by interest rate cuts, additional stimulus and good news on the employment front.
The S&P Retail Index increased 1 percent, or 6.13 points, to 618.85 as the Dow Jones Industrial Average fell 0.4 percent, or 47.15 points, to 12,896.67. The gainers included Kohl’s Corp., up 6.3 percent to $47.03; Limited Brands Inc., 4.5 percent to $46.12; Michael Kors Holdings Ltd., 4.2 percent to $44.44; Lululemon Athletica Inc., 3.9 percent to $60.16; The TJX Cos. Inc., 3.7 percent to $44.09, and Macy’s Inc., 2.7 percent to $34.27.
Kohl’s June comps fell 4.2 percent, but chief executive officer Kevin Mansell said, “We are encouraged by improved sales in the latter weeks of the month as we continued to build inventory levels.”
And Macy’s ceo Terry Lundgren said the disappointing month — Macy’s comps rose 1.2 percent — was “a function of a macroeconomic environment that is stagnant at best, and lower spending by tourists in cities such as New York.”
There were some signs to spur consumer optimism. The Labor Department said initial jobless claims fell by 14,000 to 374,000 last week — better than the 3,000 drop economists projected.
And a trio of central banks around the world stepped in to try to charge up their slumping economies. The Bank of England said it would pump another 50 billion pounds, or $78.2 billion, into the economy. The bank, which left its benchmark interest rate unchanged at a record low of 0.5 percent, has put a total of 375 billion pounds into its economy in recent years.
The European Central Bank reduced its interest rate from 1 percent to 0.75 percent, a record low for the euro zone, and the Bank of China slashed its key interest rates. While the rate cuts and stimulus spending are generally good for stock markets, the simultaneous action also reminded investors just how much support the global economy appears to need right now.
Stock were mostly down in Europe with Milan’s FSTE MIB falling 2 percent to 14,088.74, followed by Paris’ CAC 40, which sank 1.2 percent to 3,229.36, and Frankfurt’s DAX fell 0.5 percent to 6,535.56.
London’s FTSE 100 managed a small increase, rising 0.1 percent to 5,692.63.
Among the decliners were Asos.com, down 3.7 percent to 16.61 pounds; Geox, 5.6 percent to 1.80 euros, and Mulberry Group, 2.8 percent to 14.76 pounds.
The euro traded at $1.26 while the pound went for $1.56.