Mirroring the Dow Jones Industrial Average, retail stocks Friday endured their worst day in over six months as tensions in Egypt and a weaker-than-expected report on gross domestic product left them down 3 percent for the day and off 0.7 percent for the week.
The S&P Retail Index finished the day at 498.68, down 15.34 points, for its first sub-500 close since its 499.81 endpoint on Jan. 7. The 3 percent decline for the day was the biggest since the index was off 3.3 percent on July 16. While Friday’s drop came as the retail index struggled to break through and hold the 500-point plateau, July’s selloff came in the midst of a correction that had seen stocks fall from just under 500 in April to under 400.
Friday’s steep decline left retail stocks down 1.8 percent since the start of the year, while the three major indices all remained up more than 1 percent and the Dow ahead 2.1 percent.
Among the 171 issues tracked by WWD, 70 were up for the week, 98 down and three were unchanged.
The Commerce Department said the GDP grew at an annualized rate of 3.2 percent in the fourth quarter, an improvement over the 2.6 percent growth of the third quarter but below the 3.5 percent pickup analysts expected. The figure is a setback for those hoping that economic growth would lift a wide range of important economic measures, from consumer confidence to the prospects for the all-important job market.
Continued anti-government violence in Cairo also had markets on edge.
Dillard’s Inc. shares declined 3.3 percent on Friday to $40.21 despite Moody’s Investors Services’ elevation of the company’s outlook to “positive” from “stable” based on its improved operating results and operational discipline. Moody’s said the company’s “B2” corporate family rating was “constrained” by its “history of inconsistent operating performance” and uncertainty about the effect of its recent formation of a real estate investment trust to house its owned properties.
The biggest weekly drop among stocks monitored by WWD came from American Apparel Inc. Its shares fell 4.6 percent Friday to $1.05, putting their decline since last Friday at 18.6 percent. The company needs to generate EBITDA of $20 million for the year ending on Monday or fall out of compliance with terms of its loan agreement with Lion Capital. Earlier in the week, a Securities and Exchange Commission filing revealed that financier Ronald Burkle had reduced his stake in the company to 4.3 percent of the shares outstanding from 6 percent through the sale of 909,500 shares.
European markets ended the week with losses as the FTSE 100 in London and the CAC 40 in Paris both receded 1.4 percent to 5,881.37 and 4,002.32, respectively. In Asia, Shanghai’s SSE Composite rose slightly while Tokyo’s Nikkei 225 and Shanghai’s SSE Composite were down.