Retailers pull stocks lower on poor holiday sales
THE ASSOCIATED PRESS December 26, 2012 7:00PM
Barclays Specialist Geoffrey Friedman looks at his computer screen at the New York Stock Exchange in New York, Wednesday, Dec. 26, 2012. (AP Photo/Kathy Willens)
Updated: January 28, 2013 3:54PM
Stocks closed lower after a weak holiday shopping report sent shares of major retailers lower.
The Dow Jones industrial average fell 24 points to close at 13,114 Wednesday. It was the third straight loss for the Dow.
The Standard & Poor’s 500 index fell six to 1,419 and the Nasdaq composite lost 22 to 2,990.
The MasterCard Advisors SpendingPulse report found that sales of electronics, clothing, jewelry and home goods increased just 0.7 percent in the two months before Christmas.
That’s well below the growth of 3-4 percent analysts expected and the worst performance since 2008.
Macy’s, Sears and Urban Outfitters all fell.
In addition, Abercrombie & Fitch, Limited Brands, Nike and Gap were all down. Handbag maker Coach, a bellwether of the luxury market, plummeted $3.39 to $54.13. It lost nearly 6 percent of its value, more.
Right behind it was online retailer Amazon.com, which helps analysts get a read on the entire retail market. It lost nearly 4 percent, falling $9.99 to $248.63.
Plodding retail sales are a concern because consumer spending accounts for roughly 70 percent of the U.S. economy. When shoppers pull back on spending, that can take a chunk out of company earnings, which in turn pushes down the stock market.
The retail numbers are also a sign that despite scattered hints of an improving economy, including a report Wednesday about rising home prices, many consumers remain uneasy about their prospects.