By and  on July 15, 2009

Retail stocks rallied on Wednesday as the broader market rose to its biggest gain in three months after Intel Corp.’s strong performance.

The S&P Retail Index picked up 8.02 points, or 2.5 percent, to close at 330.89.

Gains among retailers and apparel vendors were nearly universal. Fashion and retail issues benefiting from the uptick the most were Stage Stores Inc., up $1.09, or 10.9 percent, to $11.12; Macy’s Inc., 91 cents, or 8.3 percent, to $11.93; Charming Shoppes Inc., 34 cents, or 8.3 percent, to $4.45; Nordstrom Inc., $1.51, or 7.5 percent, to $21.62; American Apparel Inc., 27 cents, or 7.5 percent, to $3.87, and Coach Inc., $1.54, or 6.2 percent, to $26.31.

Intel’s strong performance sent the Dow Jones Industrial Average up 256.72 points, or 3.1 percent, to close at 8,616.21, the S&P 500 was up 26.84 points, or 3 percent, to 932.68, and the Nasdaq Composite rose 63.17 points, or 3.5 percent, to 1,862.90.

The Dow and the S&P 500 hit their highest levels since June.

The rally in retail stocks came just a day after optimism about Goldman Sachs helped propel the major indices and pushed the S&P Retail Index to a gain of 1.6 percent

The stock market appeared to shrug off the Labor Department’s Consumer Price Index, which registered an overall increase of 0.7 percent in June, but declined 1.4 percent year-to-year. The monthly increase was driven by a significant jump in gas prices. The so-called core prices, which exclude the volatile food and energy sectors, rose 0.2 in June and 1.7 percent compared with a year earlier.

Retail apparel prices bounced back in June, rising a seasonally adjusted 0.7 percent after dropping for three straight months, the Labor Department said.

Compared with a year earlier, the cost of apparel at retail advanced 1.5 percent, according to the CPI. Apparel prices declined 0.2 percent in March, April and May.

Women’s apparel prices were up 1.6 percent in June and increased 2.5 percent compared with a year earlier. The increase in women’s apparel was the largest for the month of June since 1978, according to the Labor Department. Men’s apparel prices fell 1.1 percent in June, while remaining flat in 12-month comparisons.

The rise in retail apparel prices overall and in women’s is mostly attributable to seasonal factors affected by the stark contraction of the economy, said Charles McMillion, president and chief economist at MBG Information Services. McMillion said sales of spring and summer goods started earlier this year, dragging prices down in previous month, and allowing a rebound in June, as some fresh merchandise hit the stores.

“Seasonal promotional programs have been dramatically altered by this severe downturn,” he said. “People are taking deeper and earlier markdowns.”

“In general, today’s report on consumer prices suggests very little, if any, pressure on consumer prices other than the temporary surge in gasoline prices,” said Brian Bethune, chief U.S. financial economist at IHS Global Insight.

Retail prices for women’s outerwear increased 2.7 percent in June and 7.4 percent in 12-month comparisons. Women’s dresses cost 2.8 percent more in June and 11.8 percent year-over-year. Women’s suits and separates prices increased 1.6 in June and 0.5 percent from a year earlier. Prices in the broad women’s underwear, nightwear, sportswear and accessories category rose 1.8 percent in June and 2.5 percent for the 12 months. Girls’ apparel costs increased 1.5 percent in June, but declined 0.1 percent year-to-year.

Men’s suits, sport coats and outerwear prices fell 3.2 percent last month and 7.6 percent from a year earlier. Men’s furnishings costs increased 1.4 percent in June and 2.3 percent in 12-month comparisons. Men’s shirts and sweaters fell 1.7 percent in June, but were up 3 percent from a year earlier. Prices for men’s pants and shorts declined 2.5 percent in June, but rose 0.3 percent year-over-year. Boys’ apparel prices were 2.1 percent higher in June and 3.7 for the year.

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