More on SubjectMost Recent Articles On Financial
- Europe's Stock Markets Log Small Gains
- Moncler Wraps Up Road Show
- Change Ahead in Rachel Roy's Future?
Retail stocks fell almost 4 percent on Tuesday as Wall Street indicated concerns about a long global recession and the impact of the $787 billion economic stimulus package signed by President Obama.
The S&P Retail Index declined 3.8 percent to 251.54 and the Dow Jones Industrial Average dropped at an identical percentage to 7,552.60. The S&P 500 slipped below 800 for the first time this year, to 789.17, on its 4.6 percent drop.
Obama said the recovery bill that he signed in Denver Tuesday marked “the beginning of the end,” but he has stressed that it was just a start. As if to emphasize that point, General Motors and Chrysler said they needed billions of dollars more in government loans. GM said it will cut 47,000 jobs worldwide and Chrysler announced 3,000 layoffs.
Wal-Mart Stores Inc.’s shares managed a 3.7 percent increase, to $48.24, following the release of its better-than-expected fourth-quarter results. But the report that the world’s largest retailer performed better than its rivals and still sustained a decline in profitability appeared to only reinforce fears about the fourth-quarter earnings season that has just begun.
Shares of Coldwater Creek Inc. lost more than a quarter of their value — falling 82 cents, or 27.8 percent, to $2.13 — after the disclosure late Monday of a 22 percent decline in its same-store sales for the fourth quarter and forecast of a loss for the period of at least 10 cents more than expected by Wall Street analysts.
The multichannel retailer now anticipates a fourth-quarter loss of between 23 and 25 cents a share, 10 to 12 cents greater than the 13 cent loss projected by analysts polled by Yahoo Finance. A more than $20 million decline in selling, general and administrative expenses, coupled with reductions in inventory per square foot and the completion of a new $70 million revolving credit arrangement with Wells Fargo, wasn’t sufficient to mollify investors.
Other specialty stores bearing the brunt of Wall Street’s sour post-Presidents’ Day mood with double-digit declines were: The Talbots Inc., 22.9 percent to $2.15; Casual Male Retail Group Inc., 17.5 percent to 33 cents; American Apparel Inc., 17 percent to $1.91, and New York & Co. Inc., 11.7 percent to $2.11. Frederick’s of Hollywood Group Inc. was up 14.3 percent to 32 cents following an executive restructuring (see story below).
Although clearly in the minority, gainers included a number of vendors, such as Tandy Brands Accessories Inc., up 36.6 percent to $1.98; Perry Ellis International Inc., up 9.3 percent to $4.80; Liz Claiborne Inc., up 4.4 percent to $2.63, and, after matching fourth-quarter estimates and reporting cost-cutting initiatives, Fossil Inc., up 3.8 percent to 46 cents.
International markets stumbled on Tuesday, although with generally smaller declines than U.S. stocks. London’s FTSE 100 was off 2.4 percent and Paris’ CAC 40 was down 2.9 percent. Tokyo’s Nikkei 225 gave up 1.4 percent, landing at 7,645.51, but Hong Kong’s Hang Seng Index lost 3.8 percent, closing at 12,945.40.