Retail stocks shrugged off the bankruptcy of middle-market lender CIT Group Inc. and kicked off November with a 0.9 percent rise as the U.S. manufacturing industry showed signs of recovery.
This story first appeared in the November 3, 2009 issue of WWD. Subscribe Today.
The S&P Retail Index inched up 3.28 points Monday to 383.67 as the Dow Jones Industrial Average advanced 0.8 percent, or 76.71 points, to 9,789.44.
The Institute for Supply Management’s index of manufacturing activity rose to 55.7 in October from 52.6 in September — the third straight month of expansion for factories as both production and employment showed significant gains.
“It appears that inventories are balanced and that manufacturing is in a sustainable recovery mode,” said Norbert Ore, chairman of the institute’s manufacturing business survey committee.
Employment in the sector improved in October after 18 months of decline.
A sustained strengthening in the job market would be a welcome sign that the tentative recovery is being felt more broadly. Economists expect the government to report a rise in the unemployment rate to 9.9 percent on Friday and don’t anticipate a reversal in that trend until next year.
Retail gainers included Gap Inc., up 2.2 percent to $21.80; Limited Brands Inc., 1.7 percent to $17.89, and Tiffany & Co., 1.1 percent to $39.71.
Shares of Revlon Inc. increased 19.5 percent to $10.07, continuing their rise after the company posted better third-quarter profits from continuing operations last week. On Monday, Moody’s Investors Service upgraded the company’s corporate family rating to “B2” from “B3.” Its speculative grade liquidity rating rose to “SGL-2” from “SGL-3” and its outlook is stable.
“While competitive activity for mass market cosmetics remains very high, Revlon’s improved cost structure and debt profile should provide the company with sufficient financial flexibility needed to sustain market share in its core global brands while generating acceptable levels of profitability through ongoing investments in new product development,” said Janice Hofferber, Moody’s debt analyst.