By  on September 3, 2009

After dropping a total of 2.3 percent in the previous two days, retail stocks fell 0.3 percent on Wednesday as a new report showed the job market, while still tough, improved a bit last month.

Private employers shed 298,000 jobs in August, a slowdown in the rate of decline from the 360,000 positions eliminated in July, according to the ADP National Employment Report. It was the smallest drop in employment since September 2008.

The job market is closely tied to consumer spending and remains a focus of policy makers, according to the minutes of the Federal Reserve’s policy meeting last month. Uncertain job prospects, reduced household wealth, tight credit and high debt levels are all weighing on consumers.

“With these forces restraining spending, and with labor income likely to remain soft, participants [of last month’s meeting] generally expected no more than moderate growth in consumer spending going forward,” the Fed said in minutes released Wednesday.

The S&P Retail Index dipped 1.16 points on Wednesday to 356.77, as the Dow Jones Industrial Average retreated 0.3 percent, or 29.93 points, to 9,280.67.

Shares of Zale Corp. fell 8.6 percent to $5.39 after the jewelry retailer said it needed to make about $13 million in pretax accounting adjustments to previously reported results and delayed release of its fourth-quarter results, originally expected on Wednesday, until Sept. 9.

About $6.3 million of the noncash adjustments date to before 2000. The adjustments were identified as the company closed its books for the year.

“The company is in the process of finalizing the appropriate accounting treatment for those adjustments,” Zale stated.

Casual Male Retail Group Inc. declined 2 percent to $2.93 after the company said it agreed to sell 5 million shares of its common stock to institutional investors for $2.75 a share.

David Levin, president and chief executive officer, said the big and tall retailer would use the $12.6 million in net proceeds to “reduce debt, enhance liquidity and create a more flexible balance sheet and capital structure for the company during a very difficult and uncertain economic climate.”

The company has no current plans to sell additional shares.

To access this article, click here to subscribe or to log in.

load comments
blog comments powered by Disqus