By  on April 1, 2010

Retail stocks took a step back Wednesday, falling 0.8 percent on job market jitters, but the sector still managed to post a healthy gain for the first quarter.

The S&P Retail Index dropped 3.73 points to 449.79. The retail index is still relatively close to its 52-week high of 456.97 and the sector advanced 9.4 percent for the quarter. The Dow Jones Industrial Average fell 0.5 percent, or 50.79 points, to 10,856.63 for the day and was ahead 4.1 percent for the quarter.

U.S. markets headed down after investors who have been pinning their hopes for the recovery on improvement in the job market suffered at least a temporary letdown Wednesday.

Nonfarm private payrolls fell by a seasonally adjusted 23,000 from February to March, according to the ADP National Employment Report. Still, the decline was the smallest since the measure of the job market began to fall in February 2008.

Economists expect the Labor Department employment update on Friday to show a gain of 200,000 jobs. That report is expected to see some rebound from weather-related weakness in the job market in February as well as a boost from federal hiring for the 2010 Census.

Shareholders of The Talbots Inc. traded the firm’s stock down 2.6 percent to $12.96 after the company, for a third time, pushed back the deadline on a warrant exchange offer that’s required for its merger with BPW Acquisition Corp. to go through.

BPW investors were given until 6 p.m. Wednesday to exchange their warrants and the deadline passed without word from Talbots. As of the previous deadline on Tuesday, 87.4 percent of the warrants issued when BPW went public had been tendered, while 90 percent are needed for the merger to go forward. Last week, a group of hedge funds controlling 9 percent of the warrants tried to halt the exchange, but a Delaware court denied their request.

While men’s wear retailer Jos. A. Bank Clothiers Inc. led all stocks tracked by WWD with a 5.8 percent advance to $54.72 on Wednesday following better-than-expected fourth-quarter results, a number of the largest declines came from specialty stores catering to women. Among these were Limited Brands Inc., off 4.9 percent to $24.62; Bebe Stores Inc., 4.4 percent to $8.91; Charming Shoppes Inc., 3.5 percent to $5.46, and Caché Inc., 3.3 percent to $5.51. Charming Shoppes on Tuesday disclosed that it would close between 100 and 120 stores this year after finishing fiscal 2009 with a fourth-quarter loss that was smaller than analysts expected.

International markets were mostly on the way down for the day, with the Hang Seng Index sliding 0.6 percent to 21,239.35 in Hong Kong, the SSE Composite Index off 0.6 percent to 3,109.10 in Shanghai and the Nikkei 225 falling 0.1 percent to 11,089.94 in Tokyo. The CAC 40 dipped 0.3 percent to 3,974.01 in Paris, although the FTSE 100 ran countertrend, rising 0.1 percent to 5,679.64 in London.

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