By  on September 26, 2007

Retail shares were among the losers on Wall Street Tuesday as investors became rattled by consumer confidence results that were the lowest in two years and declines in existing home prices representing the steepest drop in 16 years.

While the Dow Jones Industrial Average inched up 0.14 percent to close at 13,778.65 and the Nasdaq Composite also increased slightly by 0.58 percent to 2,683.45, retail stocks were in sell-off mode, with the S&P Retail Index falling 2.66 percent to close at 469.91. One of the big losers in Tuesday's trading session was Target Corp., down by 4.59 percent to close at $61.35 in trading on the New York Stock Exchange. Target on Monday cut its September same-store sales growth estimate to between 1.5 to 2.5 percent, from a previous forecast of 4 to 6 percent, citing weaker traffic in Florida and the Northeast.

Department stores and discounters were the sectors that were particularly hard hit Tuesday, although all retail channels were impacted. Shares of Nordstrom Inc. fell 4.48 percent to close at $48.44; J.C. Penney Co. Inc. fell by 3.66 percent to close at $63.50; Sears Holding Corp. was down 3.54 percent to close at $124.27, and Macy's Inc. fell by 3.16 percent to close at $31.91.

On Tuesday, the Conference Board said its Consumer Confidence Index fell in September to 99.8, down from 105.6 in August. The previous low was in November 2005 when the index was 98.3. Also falling were its two components, the Present Situation Index to 121.7 from 130.1 and the Expectations Index to 85.2 from 89.2.

"The Consumer Confidence Index is now at its lowest level in nearly two years. Weaker business conditions combined with a less favorable job market continue to cast a cloud over consumers and heighten their sense of uncertainty and concern. Looking ahead, little economic improvement is expected and with the holiday season around the corner this is not welcome news," said Lynn Franco, director of The Conference Board Consumer Research Center, in a statement.

The percentage of consumers who participated in the Conference Board survey saying jobs are "hard to get" increased to 22.1 percent from 19.7 percent, while those claiming jobs are "plentiful" decreased to 25.7 percent from 27.5 percent in August. The outlook for the labor market wasn't much better. Consumers who expected more jobs in the months ahead inched up to 13.3 percent from 12.9 percent, while those anticipating fewer jobs increased to 18.7 percent from 15.2 percent.Adding to investors' angst was a report from the National Association of Realtors that said sale prices of existing single-family homes fell by 4.3 percent in August, representing the sixth straight month of decline. The industry group said volume dropped to the slowest pace since August 2002 and that the latest data also reflected the steepest downturn in 16 years.

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