NEW YORK — Rising fuel prices, as well as the anticipation of higher home heating oil bills this winter, are increasingly worrying investors, who fear that consumer spending may retreat.
As a result, the WWD Composite Stock Index took a nosedive, falling 1.5 percent to 1,110.54 on Friday from 1,127.24 last week, as the broader S&P 500 slipped 1.2 percent to 1,205.10 from 1,219.71.
Oil reached $68 a barrel on Friday, but it pulled back later in the day. It wasn’t enough to offset sky-high prices set earlier in the week. Also tugging on retail shares was a consumer sentiment report from the University of Michigan. The index fell sharply in August, reaching a lower level than analysts and economists had expected.
This Tuesday, investors will be closely eyeing the Conference Board’s consumer confidence report, which has shown some erosion over the past few months. Factory orders data, one of several gauges of economic strength, is also scheduled for release on Tuesday.
On Thursday, August same-store sales are reported. Analysts are expecting retailers to deliver stronger numbers due to easier year-over-year comparisons. However, a few analysts have warned that comps may be mixed in key channels, such as the department stores.
Deborah Weinswig, equity analyst at Citigroup Smith Barney, said the broadline retailers’ “sales trends may be erratic in the wake of hotter temperatures and higher gas prices that are pressuring discretionary spending for the low- and middle-income consumer.”
She said in a research note Friday that back-to-school sales appear to be “off to a tepid start, which we believe could be attributable to weak traffic due to a later Labor Day, as consumers still have a summer mindset.”
“The good news is that key fashion items appear to be selling well, such as boots, shrugs, tops, backpacks, accessories, among other items,” Weinswig wrote.
The analyst also said that the Neiman Marcus Group and Nordstrom Inc. face difficult year-over-year same-store sales comparisons for August. Neiman’s August comps last year came in with a gain of 15.3 percent, while Nordstrom’s increase was 8.5 percent.
Still, the luxury department store champs have surprised the market before, and may do it again.