Energized by falling oil prices, the stock market surged for a second straight day Thursday and retail stocks again set the pace with gains as dizzying as declines earlier in the week.
This story first appeared in the July 18, 2008 issue of WWD. Subscribe Today.
The Standard & Poor’s Retail Index outpaced the Dow Jones Industrial Average and the S&P 500, as it did Wednesday, closing 3.5 percent higher at 353.66, up 11.94 points.
The Dow advanced 207.38 points to close at 11,446.66, up 1.9 percent, while the S&P 500 increased 14.96 points, or 1.2 percent, to 1,260.32.
Again on Thursday, the driving force behind the rise was another reduction in oil prices, which fell $5.31 to $129.29 a barrel. The commodity has fallen more than $15, or 10 percent, in the last three days.
A better-than-expected earnings statement from J.P. Morgan Chase & Co. aided a large comeback in the financial sector. Wachovia Corp., Citigroup Inc. and Bank of America Corp. all posted healthy advances as did the national mortgage firms Fannie Mae and Freddie Mac. The gains buoyed the mood on a trading floor already uplifted by another round of energy price declines.
The retail stocks that had been hit hardest in recent weeks continued to make the strongest comebacks, repeating the story line of a day earlier.
Stocks of specialty retailers looked especially adept in making up ground, as investors seemed optimistic about back-to-school assortments hitting shelves and reviving profits, especially if oil price reductions were to freeze or reduce gasoline prices. Caché Inc. leapt 13.5 percent, adding onto a 13 percent gain the day before, to close at $13.43. Chico’s FAS Inc. climbed 11 percent to $5.65. Zumiez Inc. was up 7.8 percent to $14.73 and Pacific Sunwear of California Inc. rose 5.6 percent to $8.63.
In the department store sector, Gottschalks Inc. gained 10.9 percent to $1.93, Dillard’s Inc. jumped 9.6 percent to $10.19 and J.C. Penney Co. Inc. climbed 7 percent to $32.05.
Macy’s Inc. rose 5.7 percent to $18.42, putting it more than $4 above the 52-week low it hit last Friday when chief executive officer Terry Lundgren was prompted to respond to charges of a liquidity crisis.
Off-pricers shared the day’s theme. TJX Cos. Inc. hit a high for the year, up 3.3 percent to $35.27, as did Ross Stores Inc., which advanced 1.4 percent to $39.55.
A handful of vendors got in on the action Thursday, if not quite as dramatically. Maidenform Brands Inc. grew 6 percent to $15.71, Jones Apparel Group Inc. rose 5.9 percent to $14.46, Phillips-Van Heusen Corp. was up 5.9 percent to $37.12 and Polo Ralph Lauren Corp. climbed 4.5 percent to $62.59.