By  on August 31, 2010

Retail stocks slipped 2.2 percent in light trading Monday, despite word that consumers made more and felt comfortable enough to spend more in July.

It was the worst day for retail stocks in just over six weeks and brought the S&P Retail Index to a sub-400 close for the second time in a week.

The Commerce Department said disposable personal income in July rose 0.2 percent from June, when the measure of the consumer’s extra dollars came in flat. Personal consumption expenditures, a reading of prices, rose 0.4 percent in July after holding steady in June.

And consumers were stuffing a bit less under the mattress, pushing the savings rate down to 5.9 percent in July from 6.2 percent in June.

“Last month’s report indicated that consumers were pulling back; this report indicates that the American consumer is cautiously loosening up a bit and there exists pent-up demand for large-ticket items such as automobiles,” said IHS Global Insight senior principal economist Chris Christopher, in an analysis. “This is relatively good news given the steady stream of negative reports last week of plunging home sales, stock market volatility and employment conditions.”

Still, the S&P Retail Index fell 9 points to 396.82, as the Dow Jones Industrial Average retreated 1.4 percent, or 140.92 points, to 10,009.73. Retail decliners included Rue 21 Inc., 6.2 percent to $20.76, and Nordstrom Inc., 5.2 percent to $28.72.

Asian investors pushed the Nikkei 225 ahead 1.8 percent to 9,149.26 in Tokyo and the Hang Seng Index up 0.7 percent to 20,737.22 in Hong Kong. The FTSE 100 rose 0.9 percent to 5,201.56 in London, but the CAC 40 fell 0.6 percent to 3,487.01 in Paris.

The Conference Board will weigh in today with its reading on consumer confidence, which is expected to rise. Retailers’ August sales results are due on Thursday. On Friday, the Labor Department will release its report on August employment. Economists expect that payrolls slid while unemployment notched up this month.

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

load comments
blog comments powered by Disqus