US retail stocks pushed last week, increasing by 1.4% and establishing a new high for the year despite worries over decreasing spending during economic downturn.
The S&P Retail Index rose up to 359.42 last Thursday, but couldn’t sustain all the gains through the afternoon and closed ahead 4.72 points at 354.10.
Stocks were supported by a smaller-than-expected increase in jobless claims, helping the Dow Jones Industrial Average rise 0.9%, or 83.74 points, to 9,154.46. The Labor Department reported 584,000 new jobless claims last week, an increase of 25,000. The four-week moving average for initial claims fell by 8,250.
Industry analysts claimed that a more frugal, value-conscious consumer could keep pressure on retailers’ sales, which will mean that the long-awaited acceleration in top-line growth is still not yet at hand. He also predicted some back-to-school sales will shift into August at the expense of July given a later Labor Day this year and changes in the timing of tax-free shopping days.
Second-quarter results from big retailers like Saks, Macy’s, J.C. Penney and Kohl’s should be helped by stronger gross margins and cost reductions, the analyst said.
