Expectations of another cut to the Federal Reserve’s monthly bond buying program were realized late in the day, contributing to a broad decline on Wall Street that sent retail shares down 2 percent.
The S&P 500 Retailing Industry Group fell 17.76 points to 876.98, returning to its losing ways after an up day Tuesday that ended an eight-session losing streak. Retail declines were larger than those in the broader market, where the Dow Jones Industrial Average slid 1.2 percent to 15,738.79 and the S&P 500 was off 1 percent to 1,774.20.
In Ben Bernanke’s final meeting as chairman of the Federal Reserve, the Federal Open Market Committee, citing improved prospects for economic growth in the U.S., trimmed the Fed’s monthly stimulus program by another $10 billion to $65 billion beginning next month. Janet Yellen, currently vice chairman of the Fed, succeeds Bernanke as chairman on Friday.
U.S. markets started the day with the jitters — and European markets ended theirs with losses — as interest rates were raised in South Africa and Turkey to calm fears about their currencies.
Only a handful of U.S. fashion, beauty and retail issues tracked by WWD managed gains, with Coldwater Creek Inc., still in the midst of an exploration of strategic alternatives, rising the most, up 3.6 percent to 94 cents. Cache Inc. and Hanesbrands Inc. were the only other members of the WWD sample to advance more than 1 percent, with Cache up 1.5 percent to $4.70 and Hanesbrands up 1.4 percent to $65.07 in advance of its after-market report on fourth-quarter earnings, which came in 8 cents above analysts’ consensus estimates at 98 cents a share on an adjusted basis.
Hanesbrands also raised its 2014 guidance after boosting its quarterly dividend 50 percent, to 30 cents a share, on Tuesday.
Among those dragged down the most by Wednesday’s sell-off were American Apparel Inc., down 8.1 percent to 99 cents; Quiksilver Inc, down 7.3 percent to $6.98; Avon Products Inc., down 5.7 percent to $14.76, and Sears Holdings Corp., down 5.3 percent to $36.36. Other equities in the fashion and beauty sectors endured declines of less than 4 percent for the day.
Overseas, the DAX in Frankfurt was down 0.8 percent to 4,156.98, while the CAC 40 in Paris fell 0.7 percent to 4,156.98. The FTSE MIB in Milan dipped 0.6 percent to 19,337.42, while the FTSE 100 in London fell 0.4 percent to 6,544.28.
It was a mixed day for fashion, luxury and retail stocks. Mulberry’s shares closed down 23.8 percent to 7.05 pounds, after the British leather goods label issued a profit warning Wednesday. Yoox lost 3.1 percent to 28.01 euros, while Brunello Cucinelli was down 1.7 percent to 19.86 euros. British supermarket chain Sainsbury’s was among the FTSE 100’s biggest decliners, down 2.3 percent to 3.48 pounds, after the supermarket announced that its chief executive officer Justin King would resign in July.
Among the stocks on the rise were Asos.com, up 2.6 percent to 62.09 pounds; French Connection, which gained 4.1 percent to 37 pence and Aeffe, which rose 3.1 percent to 0.78 euros.
The pound traded for $1.66 against the U.S. dollar Wednesday, while the euro went for $1.37.