Doubts about the momentum of consumer spending from retailers reporting first-quarter results contributed to a 1.4 percent in retail stocks Tuesday morning.


The S&P Retail Index dipped 6.31 points to 449.36 as afternoon trading got underway, even as the Dow Jones Industrial Average advanced 23.42 points, or 0.2 percent, to 10,649.25.


While retailers reporting results today — including Wal-Mart Stores Inc., Saks Inc., The TJX Cos. Inc. and Abercrombie & Fitch Co. — generally registered improved first-quarter results, all expressed some degree of caution about the strength of the economic recovery. While all four retail firms surpassed analysts’ expectations for the just-concluded quarter, their outlooks for the second quarter and beyond generally fell short of Wall Street’s projections.


Wal-Mart’s shares rose 2.8 percent to $54.21 in morning trading, but TJX’s fell 3.7 percent to $43.60, A&Fs were off 3.4 percent to $39.40 and Saks’ surrendered 0.9 percent to $9.26. Both Wal-Mart and TJX are facing the challenge of sustaining increases in sales and market share recorded during the recession now that consumers have become a bit less emphatic in their “flight to value.”


Accordingly, shares of Ross Stores Inc., the country’s number-two off-pricer which reports results on Thursday, and Target Corp., the second largest discounter after Wal-Mart set to report on Wednesday, endured morning declines of 1.8 percent and 2 percent, respectively, dropping to $52.09 and $54.75.


With the first funds of the Greek bailout package delivered, European investors relaxed Tuesday, lifting the FTSE 100 in London 0.9 percent to 5,307.34, the CAC 40 in Paris 2.1 percent to 3,617.32 and the DAX Composite in Frankfurt 1.5 percent to 6,155.93. Asian markets also finished Tuesday’s session with gains.


For complete coverage, see Wednesday’s issue of WWD.

load comments
blog comments powered by Disqus