By  on March 16, 2010

Shares of Wal-Mart Stores Inc., which were bolstered by an upgrade from Citi analyst Deborah Weinswig, led a late-day rally that pushed the stock market into positive territory Monday.

Weinswig switched her outlook on Wal-Mart to “buy” from “hold” Monday morning, citing a possible price war in the grocery aisle as the economy improves as well as a strengthening of the retail giant’s New York apparel organization.

Wal-Mart’s stock rose 2.8 percent to $55.42 and was the strongest of the 30 stocks that make up the Dow Jones Industrial Average. The Dow ended up 0.2 percent, or 17.46 points, to 10,642.15 after spending most of the day in negative territory. The S&P Retail Index advanced 0.4 percent, or 1.67 points, to 444.12, the index’s highest close in more than a year.

Wal-Mart moved its apparel operations to New York in 2007 to better get the pulse of the fashion industry, but Eduardo Castro-Wright, vice chairman and head of the U.S. discount stores, said last month he was “disappointed” in the business and the merchandising strategy has been under review.

Weinswig said Dottie Mattison, the company’s senior vice president and general manager of apparel, has strengthened her management team. “Lack of an aligned management team in apparel has resulted in significant disruption in [Wal-Mart’s] apparel business over the past three years,” Weinswig said. “We believe that this newly aligned management team, along with improvements in global sourcing and [Wal-Mart’s] partnership with Li & Fung, could begin to yield top-line and gross margin benefits as early as [the second half].”

After the U.S. markets closed Monday, Limited Brands Inc. said it would pay a special $1-a-share dividend on April 19 to shareholders of record on April 5. Limited’s board also approved a $200 million stock repurchase program, an amount that includes $31 million still remaining on its previous $250 million authorization.

Limited noted that, through dividends and stock repurchases, it’s returned nearly $10 billion to shareholders over the last decade.

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