- Kering in Talks to Sell La Redoute to Managers
- European Stocks Log Marginal Gains
- Retail Shares Off for Second Day
A downgrade from Morgan Stanley pressured Kohl’s Corp.'s stock today, helping to pull down retail shares on what was a modestly positive day for Wall Street.
The S&P 500 Retailing Industry Group fell 0.9 percent, or 6.34 points, to 710.94, as the Dow Jones Industrial Average inched up 3.76 points to 14,455.82.
Shares of Kohl’s tumbled 4.1 percent to $46.56. Kimberly Greenberger, an analyst at Morgan Stanley, downgraded Kohl’s to underweight from equal-weight given “macro headwinds” facing the company, including “a tough economic setup and higher payroll taxes.”
Greenberger said Kohl’s had “a dearth of product newness and few desirable brands,” especially in the centercore of its stores.
Also losing ground were Chico's FAS Inc., down 3.7 percent to $17.20; Express Inc., 3.6 percent to $17.77; Under Armour Inc., 3.5 percent to $48.48; Michael Kors Holdings Ltd., 3.4 percent to $56.15, and Lululemon Athletica Inc., 2.8 percent to $64.08.
Lululemon said late Monday that it was expecting a shortage in its black Luon pants, which it deemed to be too revealing.
“We have determined that certain shipments of product received from our factories and available in store from March 1, 2013 do not meet our technical specifications,” the company said. “The ingredients, weight and longevity qualities of the pants remain the same but the coverage does not, resulting in a level of sheerness in some of our women's black Luon bottoms that falls short of our very high standards.”
The company pulled the styles from its stores, removing about 17 percent of all its women’s bottoms.
In Europe, markets continued to be riled by troubles in Cyprus.
After the market closed, Cyprus’ parliament rejected the proposed 10 billion euro, or $12.9 billion, bailout that would have imposed a levy on individuals’ savings accounts, leaving the future of the country’s banking sector in doubt.
It won't be clear what impact that decision will have on the market until Wednesday. The FTSE MIB in Milan closed down 1.6 percent to 15,670.56, followed by the CAC 40 in Paris, which sank 1.3 percent to 3,775.75. The DAX in Frankfurt retreated 0.8 percent to 7,947.79 and the FTSE 100 in London was down 0.3 percent to 6,441.32.
The euro traded at $1.29 against the dollar while the pound traded at $1.51 and the Swiss franc fetched $1.06.
Most retail and luxury stocks lost ground, including Swatch Group, down 3.2 percent to 93.20 Swiss francs; Yoox, 1.9 percent to 14.48 euros, and Compagnie Financière Richemont SA, 4.3 percent to 76.10 Swiss francs.
The exceptions included Metro AG, which gained 5.4 percent to 22.94 euros, and Brunello Cucinelli, up 1.7 percent to 17.29 euros.