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Retail stocks continued to set new highs today on Wall Street, which also managed to press higher despite a more dour global economic forecast from the International Monetary Fund.
The S&P 500 Retailing Industry Group rose 0.6 percent, or 4.48 points, to 826.16 and traded as high as 827.94, a new record. The index has repeatedly pushed into new territory this year as low interest rates drove more investors into stocks. The Dow Jones Industrial Average, rose 0.5 percent, or 75.65 points, to 15,300.34.
Gaining ground in the fashion world were Zale Corp., up 8.7 percent to $9.62; Iconix Brand Group Inc., 4.3 percent to $32.09; Sears Holdings Corp., 3.1 percent to $43.43; The Bon-Ton Stores Inc., 3.1 percent to $21.36, and Avon Products Inc., 3 percent to $21.96.
The IMF, in an update of its global economic forecast, said growth would “remain subdued at slightly above 3 percent in 2013, the same as in 2012” a slight weakening from the April forecast.
The U.S. economy is projected to expand by 1.7 percent this year, versus the 1.9 percent previously projected and a growth rate of 2.2 percent last year. The pace is expected to pick back up next year, with an uptick of 2.7 percent.
“The projections assume that the sequestration [budget cuts] will remain in place until 2014, longer than previously projected,” the IMF said of the U.S. “Private demand should remain solid, given rising household wealth owing to the housing recovery, and still supportive financial conditions.”
The economy of the euro area is expected to contract by 0.6 percent this year and return to growth next year, with a 0.9 percent bump up.
Investors in Europe, however, were feeling positive today. Most of the region’s major indexes closed at their highest levels since euro zone finance ministers agreed on aid disbursement for Greece nearly a month ago. The DAX in Frankfurt led the way, gaining 1.1 percent to 8,057.75 as London’s FTSE 100 increased 1 percent to 6,513.08 and Paris’ CAC 40 rose 0.5 percent to 3,843.56. Milan’s FTSE MIB lost 0.1 percent to 15,790.55.
The pound traded at $1.51 against the dollar, the Swiss franc fetched $1.07 and the euro was worth $1.31.
Retail and luxury stocks were mostly up, with Mulberry’s stocks seeing a leap of 8.2 percent to 9.75 pounds on rumors that Michael Herz and Graeme Fidler may replace Emma Hill as creative directors, as speculated by WWD on Monday. Also making gains were Yoox, up 5.1 percent to 20 euros, and Compagnie Financière Richemont, which advanced 2.7 percent to 88.35 Swiss francs.
Losing ground was Marks & Spencer, which dropped 1.4 percent after another quarter of disappointing results. First-quarter sales for M&S in the U.K. were up 2.7 percent, boosted by firm’s food division, which grew 4.5 percent during the 13 weeks to June 29. General merchandise, which includes the British firm’s struggling clothing division, was up 0.5 percent, but down 1.6 percent on a like-for-like basis.