By  on November 20, 2008

Retail shares plummeted 7.1 percent Wednesday as the equity markets were besieged by fears about price deflation, the health of Citigroup and the waning prospects for an auto-sector bailout from Washington.

The Standard & Poor’s Retail Index lost 17 points to end at 222.46 — its lowest close on record and down one-third from June 2002, when the index was recalibrated.

On the broader market, the Dow Jones Industrial Average fell 5.1 percent, or 427.47 points, to 7,997.28, the lowest finish for the benchmark index since March 2003.

Apparel vendors were particularly battered by investors and appear to be suffering from an ever-darkening outlook for the holiday season and next year, as well as continued third-quarter losses and declines among their key customers.

The Warnaco Group Inc., which said it would cut payrolls and capital spending, saw its shares fall 13.7 percent to $13.29.

That was hardly the worst of it. Shares of Liz Claiborne Inc. dropped 32 percent to $2.13, while Jones Apparel Group Inc. was off 21.1 percent to $4.83. Among the other decliners were VF Corp., down 10.1 percent to $39.88; Kenneth Cole Productions Inc., 9.8 percent to $6.65, and Polo Ralph Lauren Corp., 9.7 percent to $32.80.

Losing significant chunks of market capitalization among specialty stores were Charming Shoppes Inc., down 16 percent to 63 cents; Charlotte Russe Holding Corp., 13.2 percent to $4.69; Guess Inc., 12.6 percent to $11.40; Urban Outfitters Inc., 11 percent to $13.30; American Eagle Outfitters Inc., 10.4 percent to $7.50, and AnnTaylor Stores Corp., 10.2 percent to $5.30.

Most department stores and national chains fared better, with the exception of Nordstrom Inc., which was off 13.5 percent to $8.98. Posting lesser declines were J.C. Penney Co. Inc., off 7.6 percent to $15.21; Macy’s Inc., 6.7 percent to $5.68 and Kohl’s Corp., 6.2 percent to $26.39.

Saks Inc. shares fell 5.2 percent to $3.12 before news came after the market’s close that Moody’s Investors Service was reviewing the company’s debt rating for possible downgrade in light of lower-than-expected third-quarter losses.

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