Retail Stocks Have Off Month

S&P Retail Index down 1.5% in May.

Renewed optimism about Greek sovereign debt lifted global markets Tuesday but weren’t sufficient to prevent nearly universal declines in May for international equity markets, including U.S. retail stocks.


After the three-day Memorial Day weekend, the S&P Retail Index was up 0.6 percent Tuesday to 532.63, putting its decline in May at 1.5 percent. It was the first down month for the index since January. The year-to-date performance is a 4.9 percent increase, below the 8.6 percent, 6.9 percent and 6.8 percent increases logged so far in 2011 by the Dow Jones Industrial Average, the S&P 500 and the Nasdaq Composite, all three of which finished with declines in May. Of the three major indices, the largest monthly decline came from the Dow, which was off 1.9 percent from its April 29 finish.


Without exception, major world markets were up Tuesday but down for the month. Shanghai’s SSE, up 1.4 percent Tuesday, was down 5.8 percent for the month, while the Hang Seng Index, in neighboring Hong Kong, was up 2.2 percent for the day and off 0.2 percent for the month. In Europe, the DAX in Frankfurt was up 1.9 percent on Tuesday but down 2.9 percent in May.


Markets moved upward on hints of a resolution to the ongoing Greek debt crisis, although those gains were tempered in North America when The Conference Board reported an unexpected decline in its Consumer Confidence Index, which fell to 60.8 from a revised 66 in April. Both components of the Index declined, with the Present Situations portion dipping to 39.3 from 40.2 and the Expectations Index falling to 75.2 from 83.2.


Lynn Franco, director of The Conference Board Consumer Research Center, said, “A more pessimistic outlook is the primary reason for this month’s decline in consumer confidence. Consumers are considerably more apprehensive about future business and labor market conditions as well as their income prospects. Inflation concerns, which had eased last month, have picked up once again.”


Consumers were pessimistic in their outlook for the labor market over the next six months. Respondents who expect more jobs ahead decreased to 15.9 percent from 17.8 percent, while those who said they anticipate fewer jobs rose to 20.8 percent from 18.7 percent.


Limited Brands Inc. declared a special $1-a-share special cash dividend to be paid on July 1 to shareholders of record June 17. The move will subtract $319.5 million from the company’s $1.13 billion of cash and cash equivalents and reward Leslie Wexner, founder, chairman and chief executive officer, with $53.2 million for the shares he owns and holds in various trusts. He owns 16.5 percent of the firm’s shares.


Zale Corp. continued to share its shares appreciate rapidly following its report last week of positive same-store sales and a reduced loss in its third fiscal quarter. On Tuesday, shares rose 49 cents, or 8.5 percent, to $6.26 after reaching a new 52-week high of $6.60 in midday trading.