By  on March 25, 2010

The S&P Retail Index declined 5.12 points to 446.25, as the Dow Jones Industrial Average fell 0.5 percent, or 52.68 points, to 10,836.15. Among the fashion companies losing ground were Under Armour Inc., down 5.3 percent to $29.16; Charming Shoppes Inc., 3.9 percent to $6.63; Aéropostale Inc., 3.3 percent to $28.49; J.C. Penney Co. Inc., 2.4 percent to $32.79, and The Warnaco Group Inc., 2.2 percent to $45.83.

Rising prospects for better sales have helped push retail stocks up 12.8 percent over the past two months, with the sector increasing or holding steady more than two-thirds of the time. Wednesday’s fall was only the fifth losing session for retail stocks this month and the largest percentage slip since the 2.3 percent slide on Feb. 4.

The retail index hit a new 52-week high of 452.02 Monday.

James Smith, chief economist of wealth management firm Parsec Financial Management in Asheville, N.C., said costs under the new health care laws were pressuring retail stocks.

“Retailers employ lots and lots of people in relation to sales, far more than manufacturers, so presumably they’re going to get hit a lot worse,” Smith said. “I’m sure there are a large number of lawyers and accountants at every large retailer trying to figure out what this means.”

Smith said consumer net worth was rising and that employers appear set to start hiring again, both of which bode well for retailers and the economy.

Still, investors are keeping close tabs on a number of sensitive topics, including new home sales, which the Commerce Department said slipped 2.2 percent from January to February to a seasonally adjusted annual rate of 308,000. New home sales are down 23 percent since October.

And Fitch Ratings downgraded Portugal’s credit rating one level to “AA-minus” from “AA.” The outlook on the rating is negative.

“Although Portugal has not been disproportionately affected by the global downturn, prospects for economic recovery are weaker than [for its European Union] peers, which will put pressure on its public finances over the medium term,” said Douglas Renwick, credit analyst at Fitch.

Lately, it has been budget-constrained Greece making headlines and riling markets. It is still uncertain if the rest of Europe will bail the country out of its financial troubles.

But international markets were mostly on the rise Wednesday with the Nikkei 225 up 0.4 percent to 10,815.03 in Tokyo, the SSE Composite Index up 0.1 percent to 3,056.81 in Shanghai, the Hang Seng ahead 0.1 percent to 21,008.62 in Hong Kong and the FTSE 100 up 0.1 percent to 5,677.88 in London. The CAC 40 dipped 0.1 percent to 3,949.81 in Paris.

To Read the Full Article
SUBSCRIBE NOW

Tap into our Global Network

Of Industry Leaders and Designers

load comments
blog comments powered by Disqus