Shares of Sears Holdings Corp. lost ground for the third straight day since revealing Tuesday that it would close between 100 and 120 Kmart and Sears full-line stores. On Thursday, Sears’ stock in over-the-counter trading lost nearly 1.3 percent to close at $32.90. That’s a 28.2 percent drop from its close last Friday at $45.85 before the store-closure announcement.
Separately in Sears news, Fitch Ratings on Thursday downgraded Sears to “CCC” from “B.” Fitch cited a “continued deterioration” in earnings before interest, taxes, depreciation and amortization on worse-than-expected top-line growth. The ratings agency also said there is “increasing risk that EBITDA could turn negative in 2012 with top-line contraction in the midsingle-digit range” due to comparable-store sales declines and store closings. The agency did state that “liquidity is expected to remain adequate to fund 2012 working capital needs given current availability under the company’s U.S. and Canadian facilities.”
Sears disclosed Thursday that 79 locations would be shuttered, with 41 of those Sears stores and 38 Kmart sites. No word yet on when the stores would close or the number of employees to be impacted.
While Sears’ stock struggled, investors in the U.S. were generally upbeat Thursday, sending the major indices up in the second-to-last trading day of the year. Although it was a week where trading action was thin, the Dow Jones Industrial Average nevertheless rose 1.1 percent to 12,287.04. The S&P Retail Index inched up 0.5 percent, to 527.23.
For the second day in a row, Bluefly Inc. led the charge among shares of retail stocks, gaining 8.6 percent to $2.17. On Wednesday, Bluefly’s stock jumped 21.1 percent to $2 from Tuesday’s close at $1.65.
Two other companies that saw their shares jump in Thursday’s trading session were Coldwater Creek Inc., up 6.6 percent to $1.13, and Casual Male Retail Group Inc., up 5.3 percent to $3.40.
In Europe, all major indices also rose. The FTSE 100 in London was up 1.1 percent to 5,566.77, while the CAC 40 in Paris rose 1.8 percent to 3,127.56. The DAX in Frankfurt closed up 1.3 percent to 5,848.78 and the FTSE MIB in Milan increased nearly 0.8 percent to 14,908.53.
Among the stocks leading the gainers were shares of Carrefour in Paris, which rose 3.3 percent to $22.51. However, a worse-than-expected performance of Italy’s longer-term debt at auction Thursday was said to be weighing on investors. The country sold about 7 billion euros’ worth of debt Thursday, or $9.12 billion, when it had planned to sell up to 8.5 billion euros’ worth, or $11.08 billion. And the yield the country pays on its 10-year bonds remains high even after the sale at 6.98 percent, with 7 percent the rate at which the debt is deemed to be unsustainable. All conversions are at current exchange.
Earlier Thursday, Hong Kong’s Hang Seng Index closed the day down nearly 0.7 percent to 18,397.92. Tokyo’s Nikkei 225 remained unchanged at 8,398.89.
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