Investors continued to panic this morning, selling shares with abandon and then turning on a dime to push stocks up as credit and economic fears grip the now-schizophrenic financial markets.
The Dow Jones Industrial Average fell by 8.1 percent, or below 7,900, in early trading before rebounding briefly into positive territory and falling again.
President Bush stepped in and tried to sooth frayed nerves in an address from the White House, but stocks remained down. As of 10:45 a.m., the Dow was down 3.7 percent, or more than 313 points, to 8,265.45.
“We have witnessed a startling drop in the stock market, much of it driven by uncertainty and fear,” Bush said. “The United States government is acting. We will continue to act to resolve this crisis and restore stability to our markets.”
Bush announced no new programs, but the Treasury Department is considering injecting money from the $700 billion bailout approved 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 index fell 7.9 percent Thursday, it’s largest one-day drop ever.
The top decliners among 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.
At the specialty stores, Charming Shoppes, which reduced profit projections, sank 22.3 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 to gauge how the roiling financial waters will impact consumers, who are clutching their pocketbooks closer than ever if the wave of weak September sales reports this week are any indication.
Macy’s Inc. today slashed its 2008 earnings guidance to $1.35 to $1.50 a diluted share, excluding one-time consolidation costs and impairment charges. The retailer, which operates the Macy’s and Bloomingdale’s chains, had in somewhat better days penciled in profits of $1.70 to $1.85.
The firm said same-store sales fell 5.8 percent for August and September combined and could be down 3 percent to 6 percent for the fall season.
Macy’s said it continued to be financially healthy, with $740 million in cash and cash equivalents on hand and a $2 billion bank credit agreement.
“We have a strong and experienced organization that is committed to maximizing performance through the upcoming holiday season, and to continue to implement the My Macy’s localization initiative that we believe will position us well in 2009 and beyond,” Terry Lundgren, chairman, president and chief executive officer of Macy’s, said.
Charming Shoppes Inc. also acknowledged the squeeze today.
The plus-sized specialty retailer cut its third-quarter estimate for continuing operations to a loss of 35 cents to 37 cents a diluted share, down from previous projections for a 9 cent to 11 cent deficit.
In Tokyo, 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-afternoon local time in London, the FTSE 100 was down more than 5 percent.
For complete coverage, see Monday’s issue of WWD.