Retail stocks locked in early gains and built on them Thursday, finishing with a 3 percent advance, as the Dow Jones Industrial Average hit and held the 10,000 mark.
This story first appeared in the June 11, 2010 issue of WWD. Subscribe Today.
The S&P Retail Index raced up 12.77 points to 435.02 after a flat performance on Wednesday. And the Dow shot up 2.8 percent, or 273.28 points, to 10,172.53, retaking the 10,000 mark and then the 10,100 plateau as investors took in good news on the job front, indications of stronger growth in Europe this year and signs of vitality in Chinese exports.
Retail stocks registered their third-largest percentage gain of the year — behind only the 5.7 percent increase of May 10 and the 3.1 percent pickup of May 27. While still 13 percent below their 2010 high of 499.91, reached on April 26, they remain 5.8 percent above the 411.12 mark at which they concluded 2009.
The uninterrupted upward trajectory of Thursday’s performance stood in dramatic contrast to the performance of stocks on Wednesday, when a 2.1 percent upswing in retail issues was all but erased in the last hour of trading.
Among the stocks lifted by the buying tide on Wall Street Thursday was Lululemon Athletica Inc., whose shares rose 4.4 percent to $40.83 after it reported that its first-quarter earnings more than tripled on a nearly 70 percent increase in sales. Men’s Wearhouse Inc., which reported better-than-expected first-quarter profits on Wednesday evening, saw its shares move up 18.9 percent to $22.20.
Thursday’s rally was fed by a fresh reading on first-time jobless claims, which fell by 3,000 last week to a seasonally adjusted 456,000, according to a Labor Department report. The European Central Bank also decided to hold its key interest rates steady and boosted its outlook for the Eurozone GDP this year to 0.7 percent to 1.3 percent.
European investors were feeling cheery, though, and pushed the CAC 40 up 2 percent to 3,516.64 in Paris, the DAX ahead 1.2 percent to 6,056.59 in Frankfurt and the FTSE 100 up 0.9 percent to 5,132.50 in London. Additionally, the euro rebounded to nearly $1.21.
Chinese exports in May increased 48.5 percent over year-ago levels, exceeding forecasts and helping to allay fears that uncertainty in the Americas and Europe might derail growth in Asia.
The Nikkei 225 rose 1.1 percent to 9,542.65 in Tokyo and the Hang Seng Index inched up 0.1 percent to 19,632.70 in Hong Kong.
In another sign of improved demand in the U.S., the Commerce Department’s Office of Textiles & Apparel said Thursday that textile and apparel imports to the U.S. posted double-digit increases in April for the third consecutive month.
Shipments of textiles and apparel to the U.S. rose 15 percent to 4.16 billion square meter equivalents in April compared with a year earlier. Apparel imports increased 13.2 percent to 1.72 billion SME, while textile imports were up 16.2 percent to 2.44 billion SME.
The overall trade deficit inched up in April to $40.3 billion from $40 billion in March, according to the Commerce Department. Overall export and import volumes to the U.S. declined slightly compared with a month earlier.
“Export and import trends are still pointing higher, although the pace of growth is slowing after the big bounce-back in the second half of 2009,” said Nigel Gault, chief U.S. economist at IHS Global Insight.
“While our economy continues to strengthen, we still have a lot of work to do,” Commerce Secretary Gary Locke said.
Vietnam posted the largest single country increase, growing shipments of textiles and apparel 44.7 percent to 231 million SME in the month. Shipments of apparel rose 16.8 percent to 141 million SME, while textile imports increased 132.3 percent to 90 million SME.
India increased its textile and apparel shipments by 32.5 percent to 305 million SME in April, and moved up to take Vietnam’s spot as the second largest textile and apparel supplier to the U.S. after China. Apparel imports from India rose 11 percent to 98 million SME, and textile imports spiked 45.9 percent to 207 million SME.
China’s imports increased 11.6 percent to 1.7 billion SME. Apparel imports rose 9.5 percent to 574 million SME, while shipments of textiles were up 12.7 percent to 1.13 billion SME.
The volume of imports from Bangladesh recovered in April, as shipments increased 24.7 percent to 178 million SME, spurred almost entirely by an increase in apparel imports. Textile and apparel shipments from Indonesia rose 26 percent to 153 million SME and imports from Pakistan advanced 21.7 percent to 256 million SME.
South Korea was once again the only top supplier to the U.S. to post declining shipments of textiles and apparel, as imports from the country dropped 16.2 percent to 110 million SME.
The top apparel suppliers to the U.S. in April were China, Vietnam, Bangladesh, Indonesia and Honduras. China was also the top textile supplier, followed by Pakistan, India, Mexico and South Korea.