Initial concern about the health of Italian banks has now expanded into worry about French and German banks. This dragged down the French CAC as it closed down 4 percent to 3,897, while the German DAX slid almost 3 percent close at 8,753. Credit Suisse stock has slumped to a 27-year low.
The Italian market ended the day by dropping 5.6 percent to 15,773 and the FTSE Italia banks index has fallen 10 percent in just five days. The fear is being felt in Italian retailers as well as at fashion firms like Luxottica, which ended the day lower by 3.8 percent to 49.40 euros or $55.99 in today’s exchange rates. Ferragamo closed down by 2.9 percent to 18.82 euro, or $21.33, and Tod’s SpA ended the day down by 2.75 percent to 65.50 euro, or $74.24.
The Dow Jones Industrial Average is falling by 310 points in midday trading to 15,603, the S&P 500 is down 27 points to 1,824 and the Nasdaq is declining by 31 points to 4,251. The S&P Retail ETF is down 38 cents to 38.13.
Gold has become the safe haven investment du jour as it has risen by $49.50 to sell at $1,244 an ounce. ATS Bullion in London said it has people lining up to buy physical gold. “It’s been crazy. It’s the best week since 2012. We’ve had people queuing round the block,” said Michael Cooper of ATS Bullion. Oil has dropped down to $27 a barrel.
One of the biggest losers in retail today was Blue Nile, the online jeweler, whose stock was falling over 18 percent in midday trading to $25.16. The company is forecasting first quarter earnings of 8 cents to 11 cents, which is lower than the estimate of 13 cents. Full fiscal year 2016 revenues are expected to be in the range of $465 million to $495 million, which misses the Capital IQ estimate of $522 million.
Avon stock is also down, by 14 percent to $2.77, after the beauty company reported that fourth quarter total revenue dropped 20 percent to $1.6 billion and missed the FactSet estimate of $1.8 billion. The net loss was $333 million or a loss of $0.76 per diluted share as compared to last year’s fourth quarter loss of $331 million or a loss of $0.75 per share.
Skechers started the day on a positive note with its stock rising by over 10 percent, but the negativity in the market overcame investors and it too traded in negative territory by midday. The stock was down 10 cents to $27.07. Revenue came in at $722.7 million, which was higher than the FactSet consensus of $693 million, while earnings per share of 19 cents were just one penny shy of the estimate of 20 cents. Fiscal year 2015 sales were $3.147 billion and easily topped last year’s net sales of $2.378 billion. The sneaker company said it is comfortable with the analyst’s range of $885 million to $920 million in net sales for the first quarter.