Retail shares logged their first gain of the week Wednesday, advancing 0.7 percent after the Federal Reserve said the pace of the recession was slowing.
The S&P Retail Index increased 2.11 points to 311.34, as the Dow Jones Industrial Average dipped 0.3 percent, or 23.05 points, to close at 8,299.86. Gainers included Stein Mart Inc., up 12.7 percent to $7.82; Chico’s FAS Inc., 5.2 percent to $9.96; Macy’s Inc., 4.6 percent to $11.39, and Nordstrom Inc., 4.4 percent to $19.08.
“Household spending has shown further signs of stabilizing but remains constrained by ongoing job losses, lower housing wealth and tight credit,” said the central bank’s Federal Open Market Committee, led by chairman Ben Bernanke.
The bank kept its target range for the benchmark federal funds interest rate at 0 percent to 0.25 percent. The committee also signaled that it was not as concerned about deflation as it had been by not alluding to it in its statement. In April, the committee said it saw “some risk that inflation could persist for a time below rates that best foster economic growth and price stability.”
The picture is somewhat rosier abroad.
The Organization for Economic Co-operation and Development boosted its growth outlook for China and India for 2009 and 2010, but continues to expect U.S. and other rich nations to post declines this year and rebound weakly in 2010.
“A recovery already appears to be in motion in most non-OECD countries,” said Jørgen Elmeskov, acting chief OECD economist. “This is particularly so in China, against the background of substantial monetary and especially fiscal stimuli.”
The OECD said China’s economy would grow 7.7 percent this year and 9.3 percent in 2010, substantially faster than the respective 6.3 percent and 8.5 percent forecasts made in March.
But the Paris-based OECD expects U.S. economic activity to fall 2.8 percent this year, a smaller decline than the 4 percent it forecast in March, and grow only 0.9 percent in 2010.