Retail stocks last week enjoyed their third positive week in the last four — and their best since late March — despite the drama surrounding CIT Group Inc.
This story first appeared in the July 20, 2009 issue of WWD. Subscribe Today.
Following a 0.5 percent increase on Friday, the S&P Retail Index finished the week at 335.54, an 8.4 percent jump over the prior week. Although now up 20.2 percent for the year, the index hadn’t performed as well since the week of March 23, when it registered a 9.5 percent gain. However, the index closed below 300 — at 296.88 — that week as hopes of a gradual recovery in retail sales began to gain traction.
All three major indices scored healthy gains last week, but even the strongest of the three — the Nasdaq Composite — lagged the S&P Retail Index. The Nasdaq rose 7.4 percent to 1,886.61 for the week, lifted by encouraging second-quarter technology earnings and the prospects of more to come. It’s now ahead 19.6 percent for the year.
While CIT struggled to find new financing and stave off bankruptcy, several of the largest financial firms, including Goldman Sachs Group and Citibank, dazzled the markets with strong profits, helping the Dow Jones Industrial Average rise 7.3 percent for the week to 8,743.94 and the S&P 500 gain 7 percent to finish at 940.38. The increase reduced the Dow’s decline for the year to date to 0.4 percent while the S&P 500’s increase for the year moved up to 4.1 percent.
CIT finished the week at 70 cents, off 54.3 percent and down 96.5 percent since the start of the year. Shares fell 75 percent on Thursday before trading was halted in advance of the news that a second round of federal assistance for the New York-based factoring and finance firm wouldn’t be forthcoming. The stock more than doubled early Friday before finishing the day up 70.7 percent.
Of the 174 retail, fashion and beauty firms tracked by WWD, 154 finished with increases for the week, 18 were down and two were unchanged.