Retail shares were trampled after an unexpected contraction in the service sector further signaled a recession.
As a result, the Dow Jones Industrial Average plunged more than 300 points, closing down 2.9 percent to 12,265.13. The broader S&P 500 also declined 3.2 percent to 1,336.64. The WWD Composite Index, which includes apparel retailers, vendors and beauty firms, dropped 2.2 percent to 873.1, while the S&P Retail Index sank 3.5 percent to close at 396.67. The loss on the WWD Composite Stock Index followed a 2.5 percent decline on Monday.
The luxury sector fumbled, as shares of high-end department stores Saks Inc. and Nordstrom Inc. tanked. Saks closed down 8.1 percent to $16.46, while Nordstrom dropped 6.2 percent to $37.05.
Other notable decliners included J.Crew Group, which fell 5.3 percent to $41.72, action sports apparel retail Zumiez Inc., down 6.3 percent to $19.02, Aéropostale Inc., declining 6.2 percent to close at $25.78, and urban-inspired retailer Citi Trends Inc. plummeted 7.1 percent to $12.53.
The Institute for Supply Management said its January index of the service sector, which accounts for about two-thirds of the economy, dropped below 50, hitting its lowest point since October 2001. The index fell to 41.9 from 54.4 the previous month.
Alberta Ferretti's "Rainbow Week" sweaters are back. The designer closed her #MFW show with a few day-of-the-week sweaters, which first debuted on the catwalk last January as part of the pre-fall 2017 collection. #wwdfashion (📷: @delphineachard)