News of the apparent bailout of CIT Group Inc. helped lift retail stocks to their highest level of the year Monday and contributed to strong gains throughout the equity markets.
This story first appeared in the July 21, 2009 issue of WWD. Subscribe Today.
The S&P Retail Index rose 6.69 points, or 2 percent, to 342.23 as the markets closed, just beating out the previous high-water mark of 342.1 established on May 5 and its second best showing, a 342 close on June 2.
All three major indices posted gains of at least 1 percent and, like the retail index, enjoyed milestones. The Dow Jones Industrial Average leaped 104.21 points, or 1.2 percent, to 8,848.15, putting it into positive territory for 2009. The S&P 500 was up 10.75 points, or 1.1 percent, to 951.13, the best mark since November. The Nasdaq Composite, which has enjoyed strength as earnings for technology stocks have exceeded expectations, was up for the ninth straight day, rising 22.68 points, or 1.2 percent, to 1,909.29.
CIT, whose shares have seesawed in the past week along with its prospects for revival, saw a strong rebound on Monday. The stock, which bottomed out at 31 cents Thursday and climbed to 70 cents on Friday, added another 55 cents, or 78.6 percent, to close at $1.25.
Although not confirmed until after the markets closed, word CIT had a rescue plan in place lifted even the stocks of companies that don’t rely on the lender for factoring or other financing. The markets were also buoyed by news that Caterpillar Inc.’s stock had been upgraded to “buy” one day ahead of the release of second-quarter earnings and The Conference Board’s report that the Leading Economic Index in June increased for the third consecutive month, to 100.9 from 100.2 in May and 98.9 in June. That put its gain for the last six months at 2 percent.