Concerns over consumer spending, the impact of the ongoing housing slump and last week's weaker-than-expected same-store sales report had the market in a tizzy. After the dust settled, the major indices had pretty much closed the day flat while the retail sector was up slightly.
Bits of good news had triggered a spike in stock prices earlier in the day: The Federal Reserve added another $2 billion of liquidity to the financial markets.
The move was part of a strategy aimed at quelling worries that the subprime mortgage problems would infect other lending products in the market. The Federal Reserve and the world's central banks already have infused the financial markets with more than $400 billion in liquidity.
In the retail sector, investors picked over a "strong buy" upgrade on shares of Gap Inc., a solid retail sales report from the government (see related story on this page), and a lowered profit outlook from Sears Holdings Corp. In the end, Monday was a bumpy ride with retail stocks surging in the morning session before pulling back by the early afternoon and closing the day with a slight gain.
At the bell, the Dow Jones Industrial Average closed down 0.02 percent to 13,236.53 while the broader S&P 500 shed 0.05 percent to 1,452.92. The S&P Retail Index added 0.2 percent to 471.83.
An hour out of the gate, the Dow had jumped 0.5 percent, or about 65 points, to 13,304, while the S&P Retail Index rose 1.2 percent to 476.25. Some of the big gainers were Aéropostale Inc., BJ's Wholesale Club Inc., Charlotte Russe Holding Corp. and Dress Barn Inc., which watched their stocks rise 8.4, 4.5, 6 and 5.3 percent, respectively.
By the afternoon session, the S&P Retail Index had slowed with a 0.7 percent gain to 473.93. Retail stocks were mixed with some of the earlier gainers pulling back while the rest of the sector seemed to show more red than green. Casual Male Retail Group Inc. was down 5.8 during the early afternoon, while Gottschalks Inc. was off 6 percent on news of executive changes. However, Target Corp. was trading up 1.6 percent and Wal-Mart Stores Inc. was chugging along with a 0.5 percent gain to its stock.
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