Retail stocks rose and fell and rose again Wednesday, ending with a 0.9 percent increase as investors tried to determine if the rally of the last two weeks would continue.
This story first appeared in the November 10, 2008 issue of WWD. Subscribe Today.
The S&P Retail Index increased 2.47 points to 288.71 and the broader Dow Jones Industrial Average climbed 89.84 points, or 1.2 percent, to 7,749.81. Retail stocks have risen 26.2 percent since March 9, the day before banking giant Citigroup Inc. encouragingly said it had turned profitable in January and February.
Some of Tuesday’s back and forth came as weaker-than-expected demand for five-year Treasury notes at a government auction outweighed news that new home sales rose. China, a key holder of U.S. debt, has recently expressed concerns about the U.S. dollar and the financial crisis, and floated the idea of a new global currency to replace the dollar.
New home sales increased a seasonally adjusted 4.7 percent in February compared with January, the first month-to-month increase since July, said the Commerce Department. Still, the number of new homes sold was down 41.1 percent from a year earlier, illustrating just how far the real estate market has fallen.
Economists argue the housing sector led the country into the recession and the credit crunch and must begin to rebound for a recovery to set in.
The downturn has hit not only the average consumer, but also to a lesser extent, the executive suite.
Despite Gregg Steinhafel’s rise to Target’s Corp.’s corner office in May, the discounter’s chief executive officer took a 2.9 percent cut in his pay last year, bringing in $5.9 million, according to a proxy filed with the Securities and Exchange Commission. Steinhafel’s take-home included a base salary of $1.3 million as well as $72,794 worth of personal travel in company aircraft, which Target said was a security precaution. Steinhafel succeeded Robert Ulrich, former chairman and ceo, as chairman on Jan. 31. Shares of Target increased 0.5 percent to $33.23 on Wednesday.