Retail stocks kicked off the week with a 1 percent drop Monday, continuing the slide that lowered the sector 5.6 percent last week.

The S&P closed down 4.24 points to 403.48 as the Dow Jones Industrial Average fell 5.29 points to 10,138.52. Retail decliners included Dillard’s Inc., down 3.3 percent to $23.02; J. Crew Group Inc., 3.2 percent to $37.94; Nordstrom Inc., 1.7 percent to $34.95, and Macy’s Inc., 1.1 percent to $18.82.

Investors are still uneasy over Europe’s heavy debt loads, hints that policy makers around the world will ratchet back economic stimulus spending and lackluster spending by U.S. consumers. Shoppers are still taking a relatively cautious approach toward spending even as they’ve seen their wallets grow a bit fatter.

The Commerce Department’s May reading of personal consumption expenditures showed a 0.2 percent uptick from April. That gain was better than the 0.1 percent economists expected, but still lagged the 0.4 percent uptick seen in disposable personal incomes. Disposable incomes shot up 0.6 percent in April as expenditures increased less than 0.1 percent.

European investors pushed the CAC 40 up 1.6 percent to 3,576.45 in Paris, as the DAX advanced 1.4 percent to 6,157.22 in Frankfurt and the FTSE 100 rose 0.5 percent to 5,071.68 in London.

The Hang Seng Index inched up 0.2 percent to 20,726.68 in Hong Kong and the Nikkei 225 dipped 0.5 percent to 9,693.94 in Tokyo.

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