By  on June 1, 2010

Retail stocks managed a 1.6 percent gain last week despite a decline on Friday, but the advance wasn’t strong enough to prevent their first losing month since January.

The S&P Retail Index ended Friday’s trading session at 443.45, down 1.2 percent for the day. The pullback erased some, but hardly all, of the appreciation from Thursday’s 3.2 percent rally. The sector ended May with a 6.7 percent decline, the first down month since January, when it was off 3.3 percent. The index began trading this week 11.3 percent off the 499.91 high for the year reached on April 26.

Retail issues have been sensitive to the increasingly cautionary language used by stores in providing guidance about the second quarter and the rest of this year, even as retailers generally met or exceeded analysts’ expectations in reporting first-quarter results.

Of 172 fashion, beauty and retail issues monitored by WWD, last week, 117 had increases and 50 had decreases. Five were flat. Only 18 had increases the week of May 17.

The Dow Jones Industrial Average lost 1.2 percent on Friday, to close at 10,136.63, and was off 0.6 percent for the week and 7.9 percent for the month. While the S&P Retail Index remains ahead for the year with a 7.9 percent gain, the Dow is down 2.8 percent since Dec. 31.

In Europe, London’s FTSE 100, Paris’ CAC 40 and Frankfurt’s DAX all improved between 2 and 2.5 percent last week, but were down 6.6 percent, 7.9 percent and 3.1 percent, respectively, for the month. Growing confidence in the Eurozone’s ability to manage Greece’s debt crisis gave way to new fears on Friday when Fitch Ratings downgraded Spain’s credit rating one notch.

In Asia, Hong Kong’s Hang Seng Index finished ahead 1.1 percent for the week but was off 6.4 percent for the month. Tokyo’s Nikkei 225 lost 0.2 percent for the week to bring its May drop-off to 11.7 percent. Shanghai’s SSE Composite Index gained 2.8 percent last week, but its May and year-to-date declines stood at 7.5 percent and 19 percent, respectively.

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