By  on August 14, 2012

Better-than-expected retail sales in July jolted investors today, who pushed the S&P Retail Index up 0.9 percent, or 5.46 points, to 627.66.

The sector outperformed the Dow Jones Industrial Average, which inched up just 2.71 points to 13,172.14. Michael Kors Holdings shot up 16.5 percent to $49.33, and Estée Lauder Cos. Inc. rose 9.3 percent to $60.13. Both companies reported stronger quarterly earnings.

Also on the rise were Saks Inc., up 6.2 percent to $11.52; Christopher & Banks Corp., 5.6 percent to $2.46, and The Buckle Inc., 3.7 percent to $39.91.

The Commerce Department’s reading of overall July retail sales rose 0.8 percent — much better than the 0.3 percent gain economists had penciled in.

“It is apparent that after a cautious second quarter, shoppers decided to head to the mall and open their wallets despite rising gasoline prices,” said Chris Christopher, IHS Global Insight’s U.S. Economist. “In addition, the heat wave that started at the end of June and continued into July may have assisted clothing, sporting goods, and building material outlet sales.”

Still, Christopher warned that spending patterns were fragile and that, “Robust and enduring consumer spending growth will happen once job prospects improve and consumer confidence jumps out of recession territory.”

Europeans, however, are weathering more acute economic pains.

The region’s official statistics agency said the euro zone’s second-quarter GDP fell 0.2 percent versus the prior year and slipped 0.4 percent from a year earlier.

More encouragingly, Germany, which has been Europe’s economic engine lately, saw its GDP grow by 0.3 percent versus the first quarter and 1 percent versus a year ago.

Frankfurt’s DAX gained 0.9 percent to 6,974.39 as Milan’s FTSE MIB rose 0.9 percent to 14,656.87, Paris’ CAC 40 increased 0.7 percent to 3,450.27 and London’s FTSE 100 rose 0.6 percent to 5,864.78.

Among the gainers were Marks and Spencer Group, 1.7 percent to 3.56 pounds; Salvatore Ferragamo Italia, 1.1 percent to 17.38 euros; Burberry Group, 1.1 percent to 13.62 pounds, and Luxottica Group, 0.6 percent to 28.88 euros.

The euro traded at $1.23 and the pound went for $1.57.

To access this article, click here to subscribe or to log in.

To Read the Full Article
SUBSCRIBE NOW

Tap into our Global Network

Of Industry Leaders and Designers

load comments
blog comments powered by Disqus