By  on May 9, 2005

NEW YORK — A combination of upbeat economic news within the retail sector and in the overall market kept investor worries over inflation and oil prices at bay during the week’s trading.

As a result, the WWD Composite Stock Index sharply veered from the past two months and climbed 3 percent over the week to close at 1,093.94 on Friday from 1,061.68 the prior week. The S&P 500 rose less dramatically, increasing 1.3 percent over the week to end at 1,171.35. 

The retail sector got a boost from April’s same-store sales figures on Thursday. Department store same-store sales increased 2.7 percent, according to Citigroup Smith Barney analysts. This was above the firm’s forecast of 1.9 percent, and greater than the prior year’s 1.2 percent increase.

“In April, clubs led the pack, followed by the department stores, while discounters were disappointing,” said Citigroup Smith Barney analyst Deborah Weinswig. Weinswig was encouraged that weak sales in March and a wet spring did not appear to depress the sector as much as originally feared.

Although high-end department stores such as Nordstrom and Neiman Marcus continued to outperform the moderate and lower-end retailers, positive April same-store sales and a strong performance across most segments, such as apparel, accessories, handbags and cosmetics, were delivered by almost all department stores. April comps at Neiman Marcus grew 14.2 percent, and 6.9 percent at Nordstrom.

To further ease investor concerns over a slowing economy, the Labor Department released a stronger-than-expected job report Friday morning. Nonfarm payroll increased by 274,000 jobs in April, well above the forecasted 175,000. Disappointing March and February figures also were revised upward.

Hourly earnings increased slightly by 0.3 percent, but investors seemed content to not worry about inflation. The Federal Reserve met and boosted interest rates on Tuesday by 0.25 percent to 3 percent.

Analysts said May sales will continue to be impacted by the unseasonable weather, and concerns over mounting energy bills and higher borrowing costs will impact consumer confidence. Kimberly Greenberger, another Citigroup Smith Barney analyst, remained concerned about second-quarter performance “We remain cautious heading into 2Q given difficult sales and weather comparisons,” she wrote.

Weekly % Changes

(ending May 6)
Largest Gainers
Largest Losers
 CloseChange Close Change
Children’s Place45.4022.01
Family Dollar
Mothers Work14.3521.10
Wet Seal
Harold’s Stores 1.2920.56
Guess 15.5919.74
True Religion
Talbots28.84 12.88
Pacific Sunwear

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