Retail shares rally on Fed announcement

by The City Wire staff ([email protected]) 78 views 

Retail stocks rose 1.1% on Wednesday (Sept. 18)  following the surprise announcement by the Federal Reserve to stay the course on its asset purchases for the near term.


The S&P Retail Index hit a record high at 851.32, up 1% on the news. Broader market indexes also rose to uncharted territory highs. 


It was widely speculated that the Federal Reserve would begin tapering down its monthly $85 billion of debt purchases later this year. That sentiment pushed long term interest rates higher in recent weeks and somewhat curtailed consumer spending.


Wal-Mart, Dollar General and other retailers in recent weeks have said consumers are being more cautious about every discretionary dollar spent, even though they are buying up large ticket items like automobiles.


Analysts expect holiday sales to rise a modest 2% to 3% from a year ago and said there is no real inflation to speak of at this time.


Wal-Mart shares closed Wednesday at $76.42, up $1.27. Little Rock-based Dillard’s shares rose $1.08, to close at $82.40.


Other retailers also reported higher closing prices on Wednesday:
Target $65.48, up $1.10;

Dollar General $57.92, up 59 cents;

Family Dollar $74.46, up $1.72; and

Amazon $312, up $7.86 or 2.59%.