Retail stocks jumped today as the investor reading of the fiscal cliff tea leaves appeared to improve.
The S&P Retailing Industry Group rose 2.5 percent, or 15.80 points, to 655.93 as the Dow Jones Industrial Average increased 1.7 percent, or 207.65 points, to 12,795.96. Among the day’s strongest stocks were The Bon-Ton Stores Inc., ahead 8 percent to $11.35; Abercrombie & Fitch Co., 7.2 percent to $43.80; The Men’s Wearhouse Inc., 5.4 percent to $33; Jos. A. Bank Clothiers Inc., 5.2 percent to $47.10, and Fifth & Pacific Cos. Inc., 4.8 percent to $11.67.
Even as the markets grew more bullish, there were signs that the debate of the automatic tax hikes and spending cuts of the so-called fiscal cliff could linger on past New Year’s.
Wal-Mart Stores Inc. said it would pay its quarterly dividend of 40 cents a share on Dec. 27 instead of Jan. 2 to avoid a higher tax rate for investors should the country go over the cliff. Shares of the retailer increased 1.5 percent to $69.02.
“Wal-Mart’s board recognized that there are complex fiscal and federal tax rate issues that may not be resolved in the next few weeks, despite the ongoing good faith negotiations between the administration and Congress to resolve details related to the fiscal cliff,” the retailer said in a statement. “In light of this uncertainty, the board determined that moving our dividend payment up by a few days to 2012 was in the best interests of our shareholders.”
European stocks also gained ground for the day.
The FTSE MIB in Milan climbed 3.1 percent to 15,308.96, followed by the CAC 40 in Paris, which advanced 1.7 percent to 3,439.58.
The FTSE 100 in London and the DAX in Frankfurt both advanced 1.1 percent, to 5,737.66 and to 7,123.84, respectively.
The fashion sector’s biggest gainers included Tod’s, up 3.7 percent to 89.10 euros; LVMH Moët Hennessy Louis Vuitton, 3.2 percent to 127.70 euros; Ferragamo, 3.3 percent to 0.53 euros; Compagnie Financière Richemont, 4.4 percent to 67.25 euros, and Hugo Boss, 4.8 percent to 80.19 euros.
Among the few stocks that lost ground were Asos.com, which was down 1.5 percent to 21.99 pounds, and French Connection, which sank 3.1 percent to 0.24 pounds.
The euro traded at $1.27 against the dollar while the pound traded at $1.59 and the Swiss franc traded at $1.06.