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Retail Stock Retreat Continues on Wall Street

The sector slipped 1.9 percent, adding to Friday's 2 percent decline.

U.S. retail stocks logged their third consecutive day of losses today as the major indices weathered substantial but less severe damage.

The S&P 500 Retailing Industry Group surrendered 1.9 percent to close at 866.25. This follows a 2 percent drop on Friday during which the retail index fell below the 900 mark. Retail stocks have fallen 7.8 percent for the year so far as merchants struggled to attract traffic and sell spring merchandise without the aid of significant promotions.

The Dow Jones Industrial Average fell 1 percent to 16,245.87 while the S&P 500 descended 1.1 percent to 1,845.04.

In recent days, investors have focused on whether forward momentum in the economy has been sufficient to offset the tapering of bond buying by the Federal Reserve.

In its first day of trading under the ticker “LE,” Lands’ End Inc., spun off by Sears Holdings Corp., was down 6.7 percent to $29.55 while its former parent gave up 6.4 percent to close at $38.10. Coldwater Creek Inc., reported to be considering a bankruptcy filing, fell another 10.6 percent to close at 21 cents while American Eagle Outfitters Inc. slipped 7.9 percent to $11.68.

Investors will get a glimpse of the tenor of March retail sales on Thursday, when a small sample of stores will report their results for the month.

The largest gain among U.S. retail, fashion and beauty stocks monitored by WWD came from American Apparel Inc., up 4.4 percent to 49 cents after Switzerland’s FiveT Capital Holding AG reported to the Securities and Exchange Commission that it had boosted its holdings in the vertical retailer by an additional 2 million shares to 22 million, representing a 12.7 percent stake. It reported an initial 20 million share stake, equaling 11.5 percent, on Friday.

Other than American Apparel and Zale Corp., which gained 1.3 percent to $21.27, the only U.S.-based stock monitored by WWD to gain at least 1 percent was Avon Products, up 1 percent to $15.22.

Zale is in the process of being acquired by Signet Jewelers Inc. The two companies reported the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. The acquisition of Zale is expected to be completed before the end of the calendar year.

European markets also kicked off the week with losses.

The DAX in Frankfurt led the declines, dipping 1.9 percent to 9,510.85, followed by the FTSE 100 in London and CAC 40 in Paris, which both lost 1.1 percent to 6,622.84 and 4,436.08, respectively. The FTSE MIB in Milan ended down 0.8 percent to 21,988.34

Most fashion, luxury and retail stocks put on a similarly lackluster performance.

Among those that fell the most were Asos, down 5.1 percent 47.08 pounds, with fellow online retailer Boohoo down 5.6 percent to 52 pence and Italian e-commerce site Yoox dipping 3.2 percent to 23.33 euros. Mulberry closed down 4 percent to 6.77 pounds while Marks & Spencer fell 2 percent to 4.52 pounds.

The few stocks in the sector that ended the day up included Ted Baker, rising 0.3 percent to 21.64 pounds; Gemfields, up 1.8 percent to 38 pence; Hermès, which gained 0.3 percent to 243.05 euros, and Koovs, which ended up 1.6 percent to 1.88 pounds.

The euro traded at $1.37 against the U.S. dollar, while the pound fetched $1.66.