Retail stocks dipped 0.8 percent Thursday as investors fretted over the credit worthiness of Greece and an unexpected rise in U.S. jobless claims.
This story first appeared in the December 18, 2009 issue of WWD. Subscribe Today.
The S&P Retail Index slid 3.24 points to 406.72 and the Dow Jones Industrial Average gave up 1.3 percent, or 132.86 points, to close at 10,308.26. Ratings agency Standard & Poor’s cut Greece’s long-term sovereign credit rating to “BBB-plus” from “A-minus” late Wednesday. Dubai, which through its Istithmar investment vehicle owns Barneys New York, has also had debt problems that riled investors.
Global stocks traded lower Thursday with the Hang Seng Index slipping 1.2 percent in Hong Kong, the FTSE 100 sliding 1.9 percent in London and the CAC 40 dropping 1.2 percent in Paris.
In the U.S., initial jobless claims rose 7,000 last week to a seasonally adjusted 480,000, according to the Labor Department. Economists were looking for the number of people applying for unemployment to fall to 465,000.
Shares of Sears Holdings Corp. rose 0.2 percent to $75.91 after the company’s board approved a $500 million extension to its stock repurchase program. Sears, which is led by chairman Edward Lampert, also has $82 million remaining under the existing buyback plan. As of Wednesday, the retailer had bought back 7.1 million of its common stock for about $423 million this fiscal year.
Shares of The Bon-Ton Stores Inc. slipped 5.8 percent to $10.33, even though Moody’s Investors Service boosted its ratings on $510 million of the firm’s debt.
Moody’s raised Bon-Ton’s corporate family and probability of default ratings to “Caa1” from “Caa2.” The rating outlook is stable. Moody’s pinned the move on a new $75 million second lien term loan and a $675 million senior secured asset-based revolving credit facility, both of which expire in 2013. The new financing replaced a facility expiring in 2011.