Wall Street lost midday gains Wednesday, as investors worried that a half-point cut in interest rates would not be enough to fix an economic downturn.
The Dow Jones Industrial Average momentarily spiked 0.6 percent after the Federal Reserve announcement, but lost 0.3 percent for the day, closing at 12,440.96, while the S&P 500 fell 0.5 percent to 1,355.56.
After a short-lived rally retail shares sank, with the S&P Retail Index losing 1.1 percent to 405.46.
High-end department store Nordstrom Inc. dropped 3.8 percent to $36.73. Gap Inc. shed 3 percent to $18.32. Tween Brands fell 4.8 percent to close at $31.07, while teen retailer Aéropostale Inc. slid 2.5 percent to $26.12. Wal-Mart Stores Inc. was one of the few retailers able to hang onto gains, ending the day up 0.3 percent to $49.14.
Action sports apparel retailer Zumiez Inc. jumped 2.8 percent to $17.80, while Coldwater Creek Inc. increased 3.8 percent to close at $5.72.
But the biggest gainer was Stein Mart Inc., soaring 10.1 percent to $6.08, after its chairman announced he would purchase 111,400 shares of the company.
Earlier in the day, the Fed lowered the benchmark federal funds rate to 3 percent, its second cut in two weeks.
In a release, the Fed said, "Today's policy action, combined with those taken earlier, should help to promote moderate growth over time and to mitigate the risks to economic activity. However, downside risks to growth remain."
Retailers and investors also are looking for a boost from an economic stimulus package being crafted in Washington that contains tax rebates aimed at putting money in consumers' hands by June. The Senate Finance Committee passed a $161.3 billion package Wednesday that is broader than a plan backed by President Bush and passed by the House on Tuesday.
The Senate bill could go to the full chamber for a vote by the end of the week. If the Senate passes its bill, the differences between the Senate and House measures will have to be reconciled in a conference committee before it can move to the president's desk. President Bush has said the bill could be delayed or derailed if the Senate makes too many changes to the compromise legislation he struck with House leaders.
Breaking News: @louisvuitton's men's artistic director @mrkimjones is leaving the French fashion house after nearly 7 years. Jones joined Louis Vuitton in 2011, following a three year tenure as creative director of British luxury goods brand Alfred Dunhill. Jones is to exit Louis Vuitton after showing his fall 2018 collection for the brand in Paris on Thursday. Read the full exclusive story on WWD.com. Link in bio. #wwdnews #wwdfashion
For men’s fall 2018, @giuseppezanotti drew on elements from streetwear, sport, biker, combat and rock ‘n’ roll. Pictured here are a pair of shoes from the collection, featuring zippers, rhinestones, and silver hardware. Head to WWD.com to see a roundup of the accessories from Milan’s men’s fall 2018 shows. #wwdfashion (📷: Andrea Delb)
To celebrate the 25th anniversary of @ralphlauren’s snowboarding collection, the brand is mining its archives. The iconic brand is reintroducing vintage styles and dropping new designs for a color capsule that will be available in Ralph Lauren stores and @openingceremony on January 25. The capsule will consist of 10 pieces, including the Snow Beach Pullover, pictured here, which is a collector’s item that rapper Raekwon wore in Wu-Tang Clan’s “Can It Be All So Simple” video. #wwdfashion (📷: Tom Gould)
For @rochasofficial’s pre-fall 2018 collection, creative director Alessandro Dell’Acqua channeled the sophisticated and intriguing Catherine Denevue in the film “Belle de Jour.” Polished collarless coats, midi skirts, suits and ’60s graphic motifs were all featured in the collection, adding a sense of discreet luxury. See the rest of the photos on WWD.com #wwdfashion
“We tried to produce clothing of that couture quality, but the most daunting part was that we only had a matter of days [to do it],” said costume designer Lou Eyrich, who recreated Gianni Versace’s iconic looks for @americancrimestoryfx. Eyrich searched online retailers and vintage shops for original pieces from the design house and for @penelopecruzoficial, who plays Donatella Versace. Head to WWD.com to read how she created the Versace world. #wwdfashion
Only three months after her stellar debut catwalk season, @kaiagerber has inked her first big design collaboration –– with @karllagerfeld. The collection blends Lagerfeld’s Parisian chic aesthetic and the model’s signature West Coast casual style via RTW, accessories, footwear and more. The #KarlLagerfeldxKaia collection will launch in September with a series of events. Get all the details on WWD.com. #wwdnews #wwdfashion
Harrods plans to remove the famous statue of Princess Diana and Dodi Al Fayed from the bottom of the Egyptian escalators and hand it back to Mohamed Al-Fayed. “We are very proud to have played our role in celebrating the lives of Diana, Princess of Wales and Dodi Al Fayed at Harrods and to have welcomed people from around the world to visit the memorial for the past 20 years,” said Michael Ward, Harrods managing director. “With the announcement of the new official memorial statue to Diana, Princess of Wales at Kensington Palace, we feel that the time is right to return this memorial to Mr. Al Fayed and for the public to be invited to pay their respects at the palace.” More on the news, with reporting by @loreleimarfil, at WWD.com. #wwdnews