Struggling Retail Industry Causing Major Slips on Wall St.
January 16th, 2009 | by DeAndre |
That optimistic stock report we brought you a couple weeks ago is now officially old news. The Dow Jones industrial average dropped for the sixth day in a row yesterday, with its 250 point loss pitting the Dow at its lowest point since December 1.
The same can be said about Standard & Poor’s 500 index, which lost 3.4%. The Nasdaq composite dropped to its lowest point since December 4. The New York Times’ Jack Healy attributes the figures to a “gloomy retail sales report” that was published Wednesday morning, indicating that the holiday shopping season was over before it really even began.
Sales at department stores, restaurants, gas stations and a host of other retail businesses fell 2.7 percent last month – nearly double what economist had been expecting – and were 98 percent lower than sales last December, the Commerce Department reported.
Shares of Wal-Mart Stores, the world’s largest retailer, were down 1.2 percent, and Citigroup fell 22 percent, to $4.60 a share, as the beleaguered giant prepared to shear off its prized brokerage unit.
Some experts believe that these retail numbers could serve as the nail in the coffin for what economists and retailers declared to be the worst holiday shopping season in decades. Others, like C. Britt Beemer, chief executive of the America’s Research Group, suggest otherwise:
Consumers are in deep hibernation, and there is no sign that they will wake up this spring or that the retail outlook will pick up any time soon.
But the plummeting numbers weren’t just consumer spending related. News that Apple CEO Steve Jobs is planning on taking a five month medical leave through the end of the second quarter caused after-hours trading to drop Apple shares 10%.
Since January 2’s 258 point rise, the S&P 500 has lost 9.6% and the KBW Bank index has lost nearly 21%.
It leaves us wondering if next week’s presidential inauguration will return consumer confidence and get the market going in the other direction.
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