Investors continued to panic this morning, selling shares with abandonand then turning on a dime to push stocks up as credit and economic fears gripthe now-schizophrenic financial markets.
The Dow Jones Industrial Averagefell by 8.1 percent, or below 7,900, in early trading before rebounding brieflyinto positive territory and falling again.
President Bush stepped in andtried to sooth frayed nerves in an address from the White House, but stocksremained down. As of 10:45 a.m., the Dow was down 3.7 percent, or more than 313points, to 8,265.45.
“We have witnessed a startling drop in the stockmarket, much of it driven by uncertainty and fear,” Bush said. “The UnitedStates government is acting. We will continue to act to resolve this crisis andrestore stability to our markets.”
Bush announced no new programs, but theTreasury Department is considering injecting money from the $700 billion bailoutapproved by Congress directly into banks.
By mid-morning, the Standard &Poor’s Retail Index was off 2.4 percent, or 6.65 points, to 270.23. The indexfell 7.9 percent Thursday, it’s largest one-day drop ever.
The top declinersamong broadline stores this morning included Dillard’s, down 7.8 percent to$7.84; Macy’s, which lowered second-half projections, 6.6 percent to $10.70;J.C. Penney, 5.4 percent to $22.15, and Wal-Mart, 4.4 percent to $49.11.
Atthe specialty stores, Charming Shoppes, which reduced profit projections, sank22.3 percent to $2.84. Other decliners included American Eagle, 6.8 percent to$9.91; AnnTaylor Stores, 6.7 percent to $15.44; Pacific Sunwear, 6 percent to$3.93, and Wet Seal, 4.9 percent to $2.91.
Retailers are still trying togauge how the roiling financial waters will impact consumers, who are clutchingtheir pocketbooks closer than ever if the wave of weak September sales reportsthis week are any indication.
Macy’s Inc. today slashed its 2008 earningsguidance to $1.35 to $1.50 a diluted share, excluding one-time consolidationcosts and impairment charges. The retailer, which operates the Macy’s andBloomingdale’s chains, had in somewhat better days penciled in profits of $1.70to $1.85.
The firm said same-store sales fell 5.8 percent for August andSeptember combined and could be down 3 percent to 6 percent for the fallseason.
Macy’s said it continued to be financially healthy, with $740 millionin cash and cash equivalents on hand and a $2 billion bank creditagreement.
"We have a strong and experienced organization that is committedto maximizing performance through the upcoming holiday season, and to continueto implement the My Macy's localization initiative that we believe will positionus well in 2009 and beyond," Terry Lundgren, chairman, president and chiefexecutive officer of Macy's, said.
Charming Shoppes Inc. also acknowledgedthe squeeze today.
The plus-sized specialty retailer cut its third-quarterestimate for continuing operations to a loss of 35 cents to 37 cents a dilutedshare, down from previous projections for a 9 cent to 11 cent deficit.
InTokyo, worried traders drove the Nikkei 225 down 9.6 percent, or 881.06 points,to 8,276.43—the third worst decline in the index’s history. By mid-afternoonlocal time in London, the FTSE 100 was down more than 5 percent.
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