As oil prices again fell, retail stocks gained Wednesday, generally making back — and, in some cases, far surpassing — ground lost in turbulent trading sessions this week and advancing at more than twice the rate of the general market.
This story first appeared in the July 17, 2008 issue of WWD. Subscribe Today.
The Standard & Poor’s Retail Index jumped 17.8 points to 341.6, translating into a 5.5 percent gain, just one day after hitting a 52-week low.
The Dow Jones Industrial Average and the S&P 500 also came back after each hit a 52-week low, but the gains, while impressive, were more modest. The Dow advanced 276.74 points to close at 11,239.28, up 2.5 percent, and the S&P gained the same percentage, ending 30.45 points higher to close at 1,245.36.
Possibly signaling an interruption of price increases, if not necessarily quick relief for consumers, oil fell another $4.14 Wednesday to close at $134.60 a barrel, dropping more than $10 in two days.
At the same time, troubled national mortgage companies Fannie Mae and Freddie Mac received some of the investor help the government hoped would follow the Treasury Department’s commitment to the pair last weekend. Fannie Mae gained 30.1 percent to close at $9.25 and Freddie Mac rose 29.9 percent to $6.83. Higher-than-estimated profit from Wells Fargo & Co. added to investor faith.
Though oil was down and enthusiasm up, the news wasn’t all positive, but battered investors appeared to shrug off the Labor Department’s report Wednesday that its Consumer Price Index rose 1.1 percent in June, the most in 26 years, giving weight to inflation fears voiced by Federal Reserve chairman Ben Bernanke.
That didn’t stop retail stocks from logging big advances, including percentage gains that stretched into double-digit range, especially among some of the issues that have been hit hardest in recent days.
Dillard’s Inc. led the pack in the department store sector, gaining 12.7 percent to $9.30. Macy’s Inc. posted a 9.5 percent increase to $17.42.
In the specialty world, Caché Inc. was up 13 percent to close at $11.83. American Eagle Outfitters Inc., which pocketed guardedly positive reviews after an analysts’ day Tuesday, increased 9.9 percent to $13.96. Hot Topic Inc. climbed 9.9 percent to $6, and The Children’s Place also rose 9.9 percent, closing at $37.88.
Christopher and Banks Corp. jumped 9.8 percent to $7.71. Pacific Sunwear of California Inc. rose 9.7 percent to $8.17. Chico’s FAS Inc. increased 8.8 percent to $5.09.