How is this possible with so many gushing headlines during Dec about how great sales were? Off with their heads!
December isn’t looking as great as advertised, as retailers reported weaker-than-expected sales and dragged stocks to a muddled close. Tech stocks offered one of the day’s few bright spots. The dollar rebounded to a two-week high, and the correction in commodities resumed with crude oil finishing below $89. NYSE decliners led advancers by about four to three.
Any lingering notion that Americans are back to their free-spending ways was debunked on Thursday as many mainstream retailers reported disappointing December sales.Article Continues Below
While some store chains cited a blizzard that hit the East Coast after Christmas, investors seemed more concerned that December sales showed that consumers have still not returned to spending habits seen before the financial crisis hit in 2008 and will continue to be frugal.
In particular, the middle-of-the-road clothing retailers like Gap and American Eagle Outfitters, and mass-appeal department store retailers like Kohl’s Corp and Macy’s Inc failed to meet Wall Street’s lofty expectations and their shares got hammered as a result.
Of the top 10 losers on the S&P 500 index , five were retailers by early afternoon.
“The turbulence is here to stay,” said David Bassuk, a managing director at consulting firm AlixPartners. “The consumer is still very sensitive to even slight fluctuations in prices — the consumer is still looking for deals.”