Retail stocks slipped 1.1 percent Wednesday, breaking a three-session winning streak as the Federal Reserve acknowledged that higher commodity prices and the March earthquake in Japan had slowed the recovery, but said the effect would be short lived.
The S&P Retail Index fell 5.93 points to 513.93 as the Dow Jones Industrial Average declined 0.7 percent, or 80.34 points, to 12,109.67. Among the retail decliners were The Talbots Inc., down 6 percent to $3.47; Hot Topic Inc., 4.5 percent to $7.20; Ann Inc., 4.4 percent to $26.36, and Nordstrom Inc., 1.7 percent to $45.31.
The Fed also cut its projection for real GDP growth this year to 2.7 percent to 2.9 percent, from the 3.1 percent to 3.3 percent anticipated in April. Led by chairman Ben S. Bernanke, the central bank said it would maintain the benchmark federal funds interest rate at zero to 0.25 percent.
“The slower pace of the recovery reflects in part factors that are likely to be temporary, including the damping effect of higher food and energy prices on consumer purchasing power and spending as well as supply chain disruptions associated with the tragic events in Japan,” the Fed said.