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."
There'll be no rest for those headed to Europe for men's, as Paris just closed the gap with Milan. According to a provisional calendar released by the Chambre Syndicale, Paris Men's Week will now open a day earlier on January 16. See new highlights on the official lineup on WWD.com. #wwdnews #wwdfashion (📷: @kukukuba)
BREAKING: Jonathan Saunders is leaving @DVF. The designer has resigned from his position as chief creative officer of Diane von Furstenberg, the company said in a statement on Friday. At the time of his hire, von Furstenberg said Saunders’ arrival symbolized and facilitated her stepping back from the day-to-day duties that occupy the work of a full-time creative director. The British designer joined DVF in May 2016 and was in charge of all product categories. #wwdnews
For @versace_official’s spring ad campaign, the brand emphasized the archival prints from the spring tribute collection dedicated to the late Gianni Versace. Closing out the show were five of Gianni’s favorite models: Cindy, Naomi, Carla, Helena, and Claudia. Bowing on December 18, the new campaign is yet another tribute to supermodel-dom as the images by Steven Meisel are fronted by @iamnaomicampbell, @cturlington, @gisele and more. #wwdfashion
Four-time Oscar-nominated actress Annette Bening has been waiting 20 years to play Gloria Graham in "Film Stars Don't Die in Liverpool," which will be released on December 29. The movie about Graham – a Hollywood star known for her controversial relationship with a younger Englishman named Peter Turner – is based off a memoir Turned wrote. "She felt vulnerable to him, because she loved him, she really did love him. And anyone that we really truly are in love with, we re vulnerable to in a very deep way," said Bening. Read our full interview with the modern icon of an actress on WWD.com. #wwdeye (📷: @ninebagatelles; Styled by @cristinaehrlich)
The crisp white button down: a staple that can be dressed up or down and accessorized throughout the decades. Here, on a Art Basel-goer in 2017 on the left and on the iconic Audrey Hepburn in “Roman Holiday” in 1953 on the right. #tbt #wwdfashion (📷: Andrew Morales)
Known for her work with @victoriassecret, 25-year-old model @georgiafowler is raising her profile in Hollywood. Fowler stars in @vincecamuto’s holiday campaign, which launched in partnership with “Pitch Perfect 3.” “Almost every shoot with Vince Camuto, I’ve had to face a fear…It was definitely a challenge. I’m so grateful for it, though. I’ve always wanted to be a pop star, so that was the perfect chance,” Fowler said. Head to WWD.com to read about Fowler’s experience modeling, including at the #VSFashionShow, and her relationship with Nick Jonas. #wwdeye (📷: @jilliansollazzo)
EXCLUSIVE: Huda Kattan just became the first beauty influencer to land a major beauty deal. Kattan's business, @hudabeauty, has received a minority investment from private equity firm TSG Consumer Partners. The brand, which industry sources say is on track to do $200 million in retail sales for 2017, will receive support on product, retail and geographic expansion through the deal. Get all the details on the deal and read @_a_collins' interview with Kattan on WWD.com. Link in bio. (📷: @jgreenery) #wwdbeauty #wwdnews
Peruvian model @juanaburga_official – who is known for walking the runways of @rodarte, @viviennewestwood and @torybuch – is making the move to the big screen with drama “Los Últimos.” The film premiered in Argentina in November and arrives in the U.S. and Europe in 2018. On making the switch from modeling to acting, Burga told WWD: “It’s a completely different thing – a lot of people think it’s similar or try to connect things, especially like getting used to the camera or being looked at all the time or playing these different characrers, but film is a completely different story.” #wwdeye (📷: @jgreenery)
London’s newly opened @designmuseum will look back on the life and work of Azzedine Alaïa in a show that the designer helped to curate before he died of heart failure last month. The retrospective, which Alaïa had worked on with Mark Wilson, chief curator of the @groningermuseum, will look at the impact of his work worldwide. The show, “Azzedine Alaïa: The Couturier,” will run from May 10 to October 7. Read more about the exhibit on WWD.com #wwdnews #wwdfashion (📷: @zefashioninsider)