Having gained its fondest desire Thursday with a reprieve from higher interest rates, Wall Street went into a pout today, worrying anew about when the Federal Reserve would make it more expensive to borrow money.
The result wasn’t pretty, with investors selling despite a still relatively strong U.S. economy.
The S&P 500 Retailing Industry Group fell 1.5 percent to 1,196.92 as the Dow Jones Industrial Average shed 289.95 points, or 1.7 percent, to close at 16,384.79.
Shares of some of fashion’s top players were hit hard. Among the decliners were Ralph Lauren Corp., down 4 percent to $109.38; Macy’s Inc., 3.5 percent to $54.06; Avon Products Inc., 3.4 percent to $3.93; J.C. Penney Co. Inc., 2.9 percent to $9.49, and PVH Corp., 2.9 percent to $111.61.
But interest rates are far from the only worries for fashion around the world, which is also contending with the currency disparity of a strong dollar and worries about the economy in China.
A worldwide take from the WWD Global Stock Tracker showed shares in the fashion industry fell 1.5 percent to 105.10.
Many have read the Fed’s decision to hold off on raising its benchmark interest rate from near zero as a sign that the economy is still shaky.
But forecasting firm IHS Global Insight said the recent financial turmoil, which started in earnest last month when China unexpectedly started to devalue the yuan, would dampen global economic expansion, but not derail it.
“Recent financial convulsions have exacerbated the troubles of emerging markets and will undoubtedly weaken growth over the next year or two,” IHS said. “However, growth in the developed world is unlikely to be affected much. This prognosis is especially true for the U.S. economy, where domestic demand is strong and exposure to the rest of the world is comparatively low. World real GDP [gross domestic product] is projected to rise 2.6 percent this year, 3 percent in 2016, and 3.3 percent in 2017. Forecasts of economic growth in Brazil, India and Russia have been lowered in 2015 and 2016. Meanwhile, projections of U.S. and euro-zone growth have been raised in 2015 to reflect upward revisions to second-quarter GDP in both economies.”
The group expects the U.S. economy to grow by 2.5 percent this year while the euro zone perks up 1.6 percent.
IHS said there were more signs of weakness in China and that the economy there would slow to growth of 6.5 percent from 7.3 percent expansion last year.