Retail stocks advanced 0.9 percent for the week as hopes of a global economic rebound increased, but a fresh reading of consumer balance sheets for May showed consumers were squirreling away more for savings even after getting government stimulus income.
This story first appeared in the June 29, 2009 issue of WWD. Subscribe Today.
Despite a rise for the week, the S&P Retail Index dipped 0.1 percent, or 16 points, to 322.89 Friday. The Dow Jones Industrial Average fell 0.4 percent, or 34.01 points, to 8,438.39 Friday and was down 1.2 percent for the week.
European stocks were also down for the week, with the CAC 40 in Paris off 2.8 percent and the FTSE 100 in London down 2.4 percent.
Fueled by government stimulus spending, personal consumption expenditures inched up 0.3 percent to $25.1 billion in May after coming in flat for April, said the Commerce Department Friday. Personal savings as a percentage of disposable income rose to 6.9 percent in May from 5.6 percent in April.
But even as U.S. shoppers remain coy, the broader economy is seen as fighting its way back.
“The world economy will begin its recovery in the second half of 2009 as the global inventory correction winds down,” wrote IHS Global Insight economists Nariman Behravesh and Sara Johnson. “The timing and speed of regional recoveries will vary, with Asia leading, the United States coincident and much of Europe lagging behind.”
The forecasting group said global gross national product would fall 2.6 percent this year and rise 1.9 percent in 2010.