Retail stocks hit a new 52-week high Monday, rising 2 percent as global markets rallied after the finance ministers and central bankers of the G-20 said they would continue to support the economy until the recovery finds its footing.
This story first appeared in the November 10, 2009 issue of WWD. Subscribe Today.
The S&P Retail Index retook the 400 mark, advancing 7.74 points to close at 403.08, near its high for the day. The Dow Jones Industrial Average rose 2 percent, or 203.52 points, to end at 10,226.94. When the Dow passed the 10,000 mark last month, its highest intraday level was 10,157.94 on Oct. 21. Before reclaiming the plateau last week, it had sunk as low as 9,647.06.
Investors around the world were cheered that G-20 officials plan to stick with the various monetary policies and other supports that helped cushion the global economy from an even sharper fall in the past year. The Hang Seng Index in Hong Kong gained 1.7 percent for the day as both the CAC 40 in Paris and the GTSE 100 in London rose 2.1 percent.
“Economic and financial conditions have improved following our coordinated response to the crisis,” said the G-20 officials Saturday. “However, the recovery is uneven and remains dependent on policy support, and high unemployment is a major concern. To restore the global economy and financial system to health, we agreed to maintain support for the recovery until it is assured.”
Among the top retail gainers were Zale Corp., up 17.7 percent to $5.51; The Talbots Inc., 8.1 percent to $9.19; Abercrombie & Fitch Co., 7.4 percent to $37.59, and Dillard’s Inc., 6 percent to $14.17.
It was also a good day for vendors, with Jones Apparel Group Inc. up 7.5 percent to $19.19; Liz Claiborne Inc., 6 percent to $5.49; Polo Ralph Lauren Corp., 4.7 percent to $81.68, and The Warnaco Group Inc., 3.6 percent to $43.71.
Investors have pushed up shares on the hopes that fashion companies have cut expenses and trimmed inventories enough to make money this holiday season even if sales remain weak, as is generally expected. While most retailers remain cautious and reluctant to take risks with beefed-up inventories, a monthly survey from Retail Forward found shoppers are wary headed into the holiday season, but that fewer plan to cut back on their spending.
Forty-five percent of shoppers plan to curb their spending in the near term, according to Retail Forward’s October ShopperScape survey. A year ago, 53 percent were contemplating cuts.