Retail stocks pushed ahead Thursday, rising 1.4 percent and establishing a new high for the year despite continued concerns about consumer spending.
The S&P Retail Index shot up to 359.42 early Thursday, but couldn’t sustain all the gains through the afternoon and closed ahead 4.72 points at 354.10. Retail shares have been testing levels not seen since early October, when the financial crisis was at full boil.
Stocks were supported by a smaller-than-expected increase in jobless claims, helping the Dow Jones Industrial Average rise 0.9 percent, or 83.74 points, to 9,154.46. The Labor Department reported 584,000 new jobless claims last week, an increase of 25,000. The four-week moving average for initial claims fell by 8,250.
“A more frugal, value-conscious consumer could keep pressure on retailers’ sales, which will mean that the long-awaited acceleration in top-line growth is still not yet at hand,” said Bill Dreher Jr., a broadlines equity analyst at Deutsche Bank.
Dreher predicted some back-to-school sales will shift into August at the expense of July given a later Labor Day this year and changes in the timing of tax-free shopping days.
Second-quarter results from Saks Inc., Macy’s Inc., J.C. Penney Co. Inc. and Kohl’s Corp should be helped by stronger gross margins and cost reductions, the analyst said.
Posting stock gains on Thursday were Zale Corp., up 14.6 percent to $5.58; Coldwater Creek Inc., 8.1 percent to $7.17; New York & Company Inc., 6.9 percent to $3.57; Pacific Sunwear of California Inc., 5.8 percent to $3.31; AnnTaylor Stores Corp., 5.6 percent to $11.82; Destination Maternity Corp., 4.6 percent to $22.16; Tiffany & Co., 2.6 percent to $29.74; Macy’s Inc., 2.5 percent to $13.61; J.C. Penney Co. Inc., 1.4 percent to $29.46; The TJX Cos. Inc., 0.7 percent to $36.62, and Saks Inc., 0.6 percent to $5.23.
Kohl’s Corp. headed the other way, dipping 0.2 percent to $49.40.
After the market closed, off-price giant TJX got a vote of confidence from Moody’s Investors Service, which switched its ratings outlook on $775 million of the firm’s debt to “stable” from “negative.” The firm’s senior unsecured rating of “A3” and its commercial paper rating of “Prime-2” were affirmed.
“The change in outlook to stable from negative acknowledges TJX’s stable operating performance and credit metrics within the challenging economic environment,” said the debt watchdog. “In addition, the change in outlook reflects Moody’s opinion that TJX will continue to generate solid operating results despite ongoing recessionary pressures facing the retail industry.”
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Exclusive: Guillaume Henry has left @ninaricci, the fashion house said on Thursday. “After three years of mutually gratifying creative collaboration, Nina Ricci and Guillaume Henry have together decided that the designer will depart the house after the presentation of the fall-winter 2018-19 collection,” Ricci said in a statement. Get all the details on WWD.com #wwdfashion (📷: @aitorrosasphoto)
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For “The Cher Show,” an upcoming musical based on @cher’s life and career, @bobmackie is once again collaborating with the singer in designing the costumes. For decades, Mackie has designed glitzy stage costumes and red carpet looks for the 71-year-old Grammy winner. Pictured here is a sketch of some of the pieces in the wardrobe of the musical, which is set to debut in Chicago on June 12 before making its way to Broadway #wwdeye