Despite soothing words from Federal Reserve chairman Ben Bernanke on Thursday, who said he supported an economic stimulus package, investors remained wary of the economy after a Fed report showed a sharp decline in manufacturing activity.
As a result, the Dow Jones Industrial Average lost more than 300 points in afternoon trading, closing down 2.5 percent to 12,159.21 while the S&P 500 fell 2.9 percent to 1,333.27. Apparel shares were mixed with the S&P Retail Index shedding 0.7 percent to 371.45.
Sports apparel retailer Under Armour Inc. was among the New York Stock Exchange's biggest decliners, falling 13.1 percent to close at $37.23. This came after Goldman Sachs cut earnings estimates on a number of footwear and athletic apparel companies including Nike, Columbia Sportswear and Lululemon Athletica Inc.
Under Armour released financial results for 2007 after market. The company said it expects 2007 income from operations to exceed previous guidance of $81.5 million to $83 million, resulting in diluted earnings per share of approximately $1.03 to $1.04 for the full year. The firm also reiterated its 2008 outlook and expects earnings in the first half of the year in the range of 3 cents to 5 cents a diluted share.
Teen apparel retailer Aéropostale Inc. sank 6.7 percent to $21.89. On Wednesday the company said it was being investigated by the Securities and Exchange Commission on the activities of a former executive vice president and chief merchandising officer.
Quiksilver Inc. was one of the biggest gainers on the NYSE, rising 5 percent to $7.39 on an upgrade by Morgan Keegan. The company previously announced it might sell ski equipment maker Rossignol. And women's apparel retailer Charming Shoppes Inc. was up 7.4 percent to $4.94 after an investor group named three people to the company's board in an effort to refocus the business, according to a release.
Bernanke testified before the House Budget Committee on Thursday, telling lawmakers that a quickly implemented, temporary, short-term plan would have a "significant" and "measurable" impact on the economy. He is looking to inject money into the weakening economy and offset a looming crisis that has prompted consumers to sharply curtail spending.
Although he declined to support specific stimulus proposals, Bernanke stressed that initiatives such as tax rebates would be more effective in the short term than efforts to make permanent President Bush's tax cuts that expire in 2010."I think those who support making the president's tax cuts permanent...would say that the primary reason for advocating that would be for long-term growth purposes," Bernanke told lawmakers, who are considering a $100 billion package that will likely include tax refunds for consumers. "From the point of view of getting a stimulus in the next few months...I suggest that measures involved in putting money into the hands of households and firms that would spend it in the near term would be more effective," adding that he would not take a position on the politically sensitive issue of making long-term tax cuts permanent.
The National Retail Federation, representing major retailers who are concerned about the slowdown in consumer spending that makes up two-thirds of the economy, sent a letter to President Bush and Congressional leaders on Thursday urging rapid action on a stimulus package.
"U.S. retailers, who are the bellwether for our nation's changing economic climate, are greatly concerned about the softening of the U.S. economy," NRF president and chief executive officer Tracy Mullin wrote in the letter. "2007 holiday sales were the weakest since 2002, and as the new year begins, consumer spending remains sluggish....We agree with economists who say the fastest way for a stimulus to enter the economy is through the consumer."
@tradesy is turning the concept of a showroom upside down with its new space in Santa Monica. Here, the company plans to hold events, art exhibits and a showcase rare fashion pieces like this Louis Vuitton boxing set. Get all the details on Tradesy’s first showroom on WWD.com. #wwdnews
Spotted last night at the @erdem x @hm launch event: Kate Bosworth, Rashida Jones, Kirsten Dunst and Selma Blair. The party, which took place in LA, also marked the opening of their pop-up shop. “I was interested in creating a collection that wasn’t in any way disposable. It was about pieces you’d create and keep forever, things that have a permanence to it,” designer Erdem Moralioglu said. #wwdeye (📷: Katie Jones)
Renee Zellweger in yellow in 2001 and again in 2017. Chosen as one of the 12 @pantone Leading Spring Colors (and dubbed “Meadowlark”), it only makes sense that the bright hue stands the test of time and is making a resurgence this season, seen already on stars like @blakelively and @gigihadid. (📷: Donato Sardello & @rexfeatures) #wwdfashion #tbt
Dior’s 70th anniversary celebration continues with a new exhibition at the Royal Ontario Museum in Toronto. “Christian Dior,” which is scheduled to run through March 18, takes a look at the founders tenure from 1947 to 1057 and feature 40 designs. Pictured here is an evening gown from the Ailée, fall 1948-49 haute couture collection. #wwdfashion (📷: Brian Boyle)
As one of the most recognizable models in the world, Christy Turlington Burns has an insider’s view of the fashion industry and the allegations of sexual harassment swirling around it. “I can say that harassment and mistreatment have always been widely known and tolerated in the industry. The industry is surrounded by predators who thrive on the constant rejection and loneliness so many of us have experiences at some point in our careers,” Turlington told WWD, along with her suggestions for how the modeling world should protect younger women and men. Read more on WWD.com. Link in bio. (📷: Tony Palmieri) #wwdnews
@asics America has tapped a new brand ambassador: famed DJ/record producer @steveaoki. This initiative is intended to set the tone for the new brand identity and philosophy and will include partnerships with influencers and in-store and off-line activations that will continue into next year. This is Asics’ most significant marketing effort in two decades, and is expected to attract younger consumers to the brand. #wwdfashion
24-year-old Jean Prounis is redefining the rules of jewelry. Formerly a studio assistant to Jemima Kirke and a design apprentice at Ghuran, she focuses on handcrafted subtleties and ancient goldsmithing techniques. “There was a really sterile feel in the environment and I wanted to have jewelry with character that shapes how you wear it everyday,” Prounis said. Each piece is hand made in New York, either by Prounis or three other jewelers in the district. #wwdfashion
“These collections continue to build on that vision, empowering differently abled adults to express themselves through fashion,” said @tommyhilfiger of his line of adaptive apparel, which launches today. The line consists of 37 men’s and 34 women’s styles based upon the pieces from the spring Tommy Hilfiger sportswear collection. #wwdnews