A government report indicating a flattening of consumer spending in June helped push retail stocks down 1.5 percent Tuesday morning.

 

By noon, the S&P Retail Index had fallen 6.23 points to 407.36, leading the overall markets down. The Dow Jones Industrial Average had slipped 0.2 percent, or 16.96 points, at 10,657.42. Retail decliners included J.C. Penney Co. Inc., down 6.5 percent to $23.83, and J. Crew Group Inc., off  4.2 percent to $35.14.

 

Stocks were generally up in Asia, with the Nikkei 225 rising 1.3 percent in Tokyo, and mixed in Europe, with the DAX ahead 0.3 percent in Frankfurt and the CAC 40 down 0.1 percent in Paris.

 

U.S. personal consumption expenditures were flat in June compared with May, said the Commerce Department. Expenditures shot up 0.5 percent in both February and March, but fell 0.1 percent in April and gained back just 0.1 percent in May.

 

That trend line, combined with recent declines in consumer confidence and an unemployment rate of 9.5 percent, has economists and retailers worrying over the strength of the back-to-school selling season and the second half. More insight into consumer spending habits will come on Thursday, when many major retailers will report their same-store sales results for July.

 

Personal income and disposable personal income were also flat in June. Personal savings as a percentage of disposable ticked up to 6.4 percent from 6.3 percent, a 13-month high.

 

For complete coverage, see Wednesday’s issue of WWD.

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