Investors appear to be hoping the retail downturn is nearing its bottom.
Retail stocks swelled 4.4 percent Thursday as investors weighed a new regulatory framework for the financial industry from Treasury Secretary Timothy Geithner against an official reading of just how quickly the economy shrank — 6.3 percent — in the fourth quarter.
The S&P Retail Index jumped 12.81 points to 301.52, its first close above 300 since Jan. 6, and outstripped the Dow Jones Industrial Average, which advanced 2.3 percent, or 174.75 points, to 7,924.56.
Best Buy Co. invigorated investors and proved it was still possible to impress Wall Street when its adjusted fourth-quarter earnings topped analysts’ estimates. The electronics retailer’s stock jumped 12.6 percent to $37.67.
Among the principal fashion beneficiaries of the market upside was Saks Inc., with shares ahead 15 percent to $2.07. The struggling luxury retailer has moved to and above the $2 level on several occasions in recent weeks, but hadn’t closed above that mark since March 4.
AnnTaylor Stores Corp. turned in an 18.9 percent gain to $5.54, reclaiming much of the ground it had lost since closing at $6.19 on March 4 and posting a wider-than-expected loss on March 6. Ann Taylor shares hit a 52-week low of $2.41 in intraday trading on March 9.
Another hard-hit fashion stock rising ahead of market trends was Liz Claiborne Inc., which advanced 16.2 percent to $2.44. Quiksilver Inc., struggling in a tough market as it shakes off the effects of its divestiture of Rossignol, was up 18.8 percent to $1.39.
Also on the upswing were Destination Maternity Corp., charging ahead 21.2 percent to $5.95; Charming Shoppes Inc., 19.7 percent to $1.82; New York & Co. Inc., 18.3 percent to $3.30; Zale Corp., 16.7 percent to $2.38; The Talbots Inc., 13.3 percent to $3.75; Chico’s FAS Inc., 10.4 percent to $5.41; Macy’s Inc., 10.2 percent to $9.66; Hot Topic Inc., 10.1 percent to $10.64, and Nordstrom Inc., 8.9 percent to $17.77.
Geithner told the House Financial Services Committee, “What we need is better, smarter, tougher regulation, because we’ve seen the costs of these weaknesses and gaps are catastrophic to the system as a whole.”
Securities and Exchange Commission chairman Mary Schapiro also got the market’s attention when she repeated that the SEC might reinstate the uptick rule as soon as next month.
Investors largely shrugged off news of a 6.3 percent decline in gross domestic product in the fourth quarter as well as word of another rise in state unemployment claims.
Real gross domestic purchases, which measures turnover of goods and services produced in the U.S. and abroad, decreased 5.9 percent in the fourth quarter, down from a 1.5 percent decline in the third quarter, when overall GDP fell 0.5 percent, according to the Commerce Department.
Nariman Behravesh, chief economist at IHS Global Insight, said the fourth quarter was setting the stage for an “awful” first quarter, which could mark an economy that is close to the bottom. “All the incoming data suggest that the economy will contract by a staggering 7 percent to 8 percent in the first quarter, before the economy begins to stabilize,” Behravesh said. “IHS Global Insight expects the decline in real GDP in the second quarter to be ‘only’ 2 percent to 3 percent. Subsequent quarters should show a steady improvement.”
After seeing their domestic profits fall by 16 percent last year, such “steady improvement,” however limited, would be a relief for corporations.
@kith is moving into children’s. The men’s and women’s streetwear brand has launched Kidset, a Kith kids line located in New York at 64 Bleecker Street. The line includes mini versions of staple Kith pieces like the Astor bomber jacket and the Kith box logo sweatshirts, along with a wall that can display up to 120 pairs of shoes from @adidas, @newbalance, @timberland and more. #wwdfashion
“I just wanted to create this fully rounded character, but I do think what excited me most was just the opportunity to give a group of people representation that I feel needs it. I like to do characters in projects that stand for something and Karolina definitely does, so that was really exciting to me,” @ginnygardner says of her new role in @hulu’s “The Runaways.” Gardner plays Karolina Dean, a queer superhero, which is a rarity for @marvel. Read more about Gardner’s character on WWD.com #wwdeye (📷: @dandoperalski)
@heriethpaul and @gracebol have a moment on the @victoriassecret fashion show 2017. See every look from the runway on WWD.com. Link in bio. (📷: @giovanni_giannoni_photo) #wwdfashion #victoriassecret #VSFashionShow
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia