Shares of Liz Claiborne Inc. rose 6.2 percent Tuesday despite a debt downgrade.

This story first appeared in the April 8, 2009 issue of WWD. Subscribe Today.

The company outperformed the overall market, which lost ground as investors braced for first-quarter earnings reports.

Moody’s Investors Service lowered its corporate family credit rating for Claiborne to “Ba3” from “Ba1,” and its grade on $350 million in senior unsecured notes to “B2” from “Ba2.” Ratings in the “Ba” category are deemed to have “substantial credit risk,” while those one grouping down in the “B” category have “high credit risk,” according to Moody’s scale. The rating outlook is negative.

“While the company has taken aggressive steps to reduce costs and improve liquidity, it continues to face significant challenges to improve performance of its heritage wholesale brands,” said Scott Tuhy, a vice president and senior analyst at Moody’s. “The company has seen weak same-store sale performance of the key brands in its direct brand segment, such as Juicy Couture and Lucky Brand Jeans, due to the weak economic environment and these weak trends are expected to persist well into 2009.”

Shares of Claiborne closed at $3.26 Tuesday. The issue’s traded as high as $20.14 and as low as $1.46 over the last year.

Another stock that zigged when some would have expected a zag Tuesday was The TJX Cos. Inc. The off-price giant said it would increase its quarterly stock dividend by 9 percent to 12 cents a share. The dividend is payable on June 4 to shareholders of record as of May 14.

Still, shares of the firm dipped 0.7 percent to $25.75. Over the past year, the stock has traded as high as $37.52 and as low as $17.80.

“Even in a difficult economic environment, our substantial operating cash flows combined with our strong balance sheet allow us to return value to our shareholders while also maintaining significant financial flexibility,” said Carol Meyrowitz, president and chief executive officer.

Overall, it was a down day for retail. The S&P Retail Index fell 3 percent, or 9.15 points, to end the day at 300.85.

The broader market fared little better, with the Dow Jones Industrial Average falling 2.3 percent, or 186.29 points, to 7,789.56. It was the second down day in a row for the Dow, which had been on somewhat of a run with four consecutive winning days before that.