The warnings and notes of caution came from the finance, automotive and technology sectors on Thursday, but by the time the bloodbath on Wall Street was over, apparel and retail stocks needed more than their fair share of first aid.
The Standard & Poor’s Retail Index fell 3.5 percent to close at 361.28, as the Dow Jones Industrial Average plunged more than 350 points to close down 3 percent to 11,453.42 — its lowest point this year. The S&P 500 dropped 2.9 percent to 1,283.15.
Retail shares across the board suffered with the rest of the market amid investor fears that consumers will continue to cut back on discretionary items such as apparel while gas and food prices rise, said Deborah Weinswig, retail analyst at Citigroup.
“We are in an uneventful fashion cycle right now and it seems like there will be a lack of compelling product for a while,” she said.
A day after announcing a cut in its 2009 capital expenditures and store opening plans and seeing its shares rise, J.C. Penney Co. Inc.’s stock fell $1.70, or 4.5 percent, to close at $35.98.
Nike Inc., which reported higher fourth-quarter earnings but acknowledged weakness in the U.S. market after the market closed on Wednesday, saw the full force of investor anxiety as its shares plunged $6.47, or 9.8 percent, to $59.50.
In advance of reporting higher first-quarter numbers at the close of the market Thursday, Christopher & Banks Corp. declined 7.6 percent to $8.82. Other missy retailers also felt the fury as AnnTaylor Stores Corp. fell 3.7 percent to $24.62, Chico’s FAS Inc. dropped 5.3 percent to $5.76, and Charming Shoppes Inc. decreased 3.8 percent to $4.59.
One of the only retailers to register a gain was Coldwater Creek Inc. after the women’s retailer was upgraded to “buy” from “accumulate” by C.L. King & Associates. Shares of the company were up 3 percent to $5.78.
In a research note, Mark Montagna, retail analyst at C.L. King, said he believes the company will execute on the elements of its strategic plan, most importantly improving merchandise.
The declines for retailers and vendors came amid a storm of broader bad news for investors across the market. The president of OPEC speculated that the price of oil could reach $150-$170 a barrel before the end of summer, sending the commodity’s price soaring. During trading Thursday, oil prices crossed the $140 a barrel mark for the first time in history before it closed at $139.64 a barrel.
Elsewhere, General Motors Corp. slid to its lowest share price in more than 50 years, falling more than 10 percent, after Goldman Sachs downgraded the company’s rating to “sell.” The automaker was not alone, as Goldman Sachs also downgraded Citigroup Inc. to “neutral,” sending its shares down more than 12 percent.
In the teen space, the once high-flying Zumiez Inc. toppled 5.6 percent to $17.63. Abercrombie & Fitch Co. lost 3.5 percent to close at $64.33, and American Eagle Outfitters Inc. slid 3.2 percent to $15.80.
J. Crew Group tumbled 3.6 percent to $33.33, while Urban Outfitters Inc. fell 3.5 percent to $31.91.
Gap Inc. was off 1.4 percent to $16.66, while Limited Brands Inc. slid 3 percent to $17.04.
The department store sector, which has been the only retail group to underpeform the overall market for the year-to-date period, also took a beating.
Macy’s Inc. dropped 2.7 percent to $19.48 and Kohl’s Corp. faltered 3.6 percent to close at $40.53.
But Gottschalks Inc. topped New York Stock Exchange’s list of biggest advancers, growing 4 percent to $2.35.
Higher-end stores weren’t immunized from declines. Saks Inc. fell 5.9 percent to $11.51, while Nordstrom Inc. was down 4.6 percent to $31.64.
Discounter Target Corp. plunged 4.5 percent to $47.64, while Wal-Mart Stores Inc. declined a less severe 2.2 percent to close at $56.83.
Vendors fared no better than retailers. Liz Claiborne Inc. slumped 3.3 percent to $15.16, Phillips-Van Heusen Corp. dropped 3.4 percent to $37.74, and Polo Ralph Lauren Corp. slipped 2.8 percent to $64.61.
Hanesbrands Inc. dipped 1.5 percent to $28 and Coach Inc. was down 2.9 percent to $29.64, Kenneth Cole Productions Inc. dropped 2.1 percent to $13.61 and Revlon Inc. plummeted 9 percent to 81 cents.
Two Los Angeles-based companies were hit particularly hard. Blue Holdings Inc. tumbled 21 percent to 30 cents, while Tarrant Apparel Group slid 10.6 percent to 57 cents.
Under Armour Inc. dropped 4.3 percent to $26.81.
First-quarter gross domestic product, the output of goods and services generated in the U.S., increased 1 percent, the Commerce Department said Thursday. The figure was revised upward from earlier preliminary estimates of an 0.9 percent increase.
The slight improvement was most likely reflective of rebate-driven consumption, said Nigel Gault, chief U.S. economist at Global Insight. While that could continue through the second and third quarters of 2008, there is a concern “that the economy will run out of steam in the fourth quarter when the rebate effect fades,” Gault said. “First-half growth is proving better than feared, but the economy is far from out of the woods.”
— With contributions from Liza Casabona