Retail Spending Disappoints, PPI Flat

Stocks are firmly higher, but showing weakness following the overnight euphoria by a debt-deluded Europe. 

PPI 0.0%. Retail sales tanked, even despite back-to-school sales.

Advance retail sales printed at 0.0%, below consensus 0.2% and down from a downward revised 0.3% in July. Retail ex sales and autos was the lowest since December 2010. Some comments from Bloomberg on this latest miss: Clothing sales down 0.7%, department stores down 0.3%; consumers likely cut purchasing due to rising cotton, other materials costs, says Bloomberg economist Joseph Brusuelas. "Sales disappoint as households deleveraging, real incomes decline."

Retail "Snails" Sink Stocks

Jobless claims, over 400,000 for 14 consecutive weeks, didn't help either. We're now near the lows of the day, with the Dow down about 70 points. The brief rally, shown above, was a false rumor that a debt deal had been reached. Tirades and tantrums were the order of the day yesterday from the Teleprompter Tyrant! 

WASHINGTON (AP) — U.S. businesses added to their stockpiles for a 17th consecutive month in May. But sales fell for the first time in nearly a year, a sign that many companies could be forced to trim supply levels if the economy weakens.

Business supply levels grew 1 percent in May, the Commerce Department said Thursday. Sales fell for the first time in 11 months. It was the worst showing for sales since June of last year.

Retail Sales, Factory Orders Sink Market After Brief Rally Attempt

Dow off 80 on sagging retail sales, weak factory orders.

Tripple Whammy of Bad News

Not to worry. Wall Street still has its Pollyanna complex.That moving average is not headed in the right direction (see below).

Retail Sales Disappoint, Stocks Dip Modestly

from FT:
Leading US chain retailers reported sales for December that came in below Wall Street’s expectations for the important Christmas shopping period, although sales for the two holiday months saw the strongest growth since 2006.
Retail Metrics, which tracks the monthly data, said its index of same-store sales data rose 3.2 per cent against a year ago, undershooting the 3.5 per cent consensus Wall Street forecast. Sales rose by 3 per cent for the same period a year ago.
But its index for the two holiday shopping months of November and December was up 4.1 per cent against a year ago, the most robust growth in four years.
Several retailers reported that sales in December had weakened after the strong performance seen in November, as consumers pulled back on spending.



(Reuters) - The Dow and S&P 500 dipped on Thursday as disappointing sales from top retailers dented hopes about the holiday shopping season and energy shares fell with oil prices.
Telecommunications shares, including AT&T (T.N) and Verizon (VZ.N), were among top drags on the Dow.
Several big U.S. retailers missed estimates for December sales after a post-Christmas blizzard that slowed a two-month shopping spree, driving down consumer shares. Target Corp (TGT.N) fell 6.1 percent to $55.33.
The disappointing retail sales contrasted with Wednesday's economic data showing a much stronger-than-expected gain in private-sector jobs for December, which buoyed optimism about Friday's unemployment report from the Labor Department.
The retail weakness "was both surprising and disturbing, but the fact that it was so broadly based makes me think it had more to do with weather than fundamentals," said Walter Todd, who helps manage about $900 million as chief investment officer at Greenwood Capital Associates in Greenwood, South Carolina.
Analysts noted recent market gains have put the S&P 500 in overbought territory, suggesting a temporary pullback could be in store in the near term. The S&P 500 is up about 8 percent since the start of December.
"It leaves the market vulnerable to profit-taking if there's a negative reaction to the jobs data," said Chris Burba, short-term market technician at Standard & Poor's in New York.
The Dow Jones industrial average .DJI was down 36.06 points, or 0.31 percent, at 11,686.83. The Standard & Poor's 500 Index .GSPC was down 0.3 percent at 1272.59. The Nasdaq Composite Index .IXIC was up 3.75 points, or 0.14 percent, at 2,705.95.

Retail Sales: Ho Hum! (Yawn)

from Zero Hedge:

US Retail Sales came essentially in line with consensus at 0.4% versus expectations of 0.3%. As usual, the downward prior revision game continues, as the previous number was revised from 0.4% to 0.3%. And once the latest number is revised lower again next month the impact on the market will be actually positive as the next month once again come better then "prior." Retails sales came in at 0.6% on expectations of 0.3%, with the previous also getting revised lower to 0.1% from 0.2%. And auto sales dropped both M/M and Y/Y.

Large Retailers Closing Stores

Your next shopping trip may not be as convenient as it used to be. The second quarter earnings season brought news from several major retailers that they will be shutting down stores. Both Saks (SKS) and Abercrombie & Fitch (ANF) said they were closing stores in several parts of the country. Meanwhile, other stores like the struggling Blockbuster video rental chain, continue to slash stores by the dozens. American Apparel (APP), which is close to defaulting on its loans, just may be next.

Consumers just aren't shopping the way they used to. Even Wal-Mart Stores (WMT), which typically fares well during tough economic times, is worried. "The slow economic recovery will continue to affect our customers, and we expect they will remain cautious about spending," said president and CEO Mike Duke in a statement that was released during the company's second quarter earnings report.

Retail Closing Scorecard

Saks 5: The lux department store company plans to close two Saks Fifth Avenue stores in Plano, Texas, and Mission Viejo, Calif. That's in addition to stores in San Diego, Portland, Ore., and Charleston, S.C., that Saks closed a month earlier. CEO Steve Sadove said there may be more store closings to come this year.

French Connection 17: The clothing company with the edgy "FCUK" ads closed all but six of its U.S. stores as part of a reorganization. It says it will focus on selling its clothes at department stores. It also closed all 21 of its stores in Japan and sold its Nicole Farhi apparel line.

A&P 25: The Great Atlantic & Pacific Tea Co. (GAP) said it will close 25 grocery stores across five states by the end of the third quarter as part of a turnaround strategy.

American Eagle Outfitters 28: American Eagle Outfitters followed Abercrombie & Fitch into the adult market with its Martin + Osa chain, but just like Abercrombie's Ruehl, it didn't work out. American Eagle announced in the spring that the 28 M+O stores and the online business would shut down.

Winn-Dixie Stores 30: Winn-Dixie Stores (WINN) announced in late July that it will close 30 older and under-performing stores by Sept. 22.

Bebe Stores 48: The women's apparel chain announced in July that it would shutter all 48 PH8 stores after a year of flagging sales.

Men's Wearhouse 50-60: CEO George Zimmer told analysts that the company now plans to close 50 to 60 Tux stores this year.

Abercrombie & Fitch 110: Abercrombie & Fitch will close nearly 60 under-performing stores in 2010, most of them towards the end of the year. In a recent conference call, CFO Jonathan Ramsden said another 50 stores could close in 2011. The company already closed 11 stores during the first half of the year, mainly at its flagship Abercrombie & Fitch and Abercrombie stores.

Charming Shoppes 100-120: Charming Shoppes (CHRS), the parent of apparel stores Lane Bryant and Fashion Bug, plans to close 100 to 120 stores this fiscal year. After announcing a rough end to 2009, management said it planned to reduce its real estate costs by renegotiating with its landlords. As part of those initiatives, CFO Eric Specter said the company has begun reviewing its lineup of stores, looking for locations that are under-performing and will close those where it can't get better lease terms.

Blockbuster 500-545: Under assault by video-on-demand and online video rentals, Blockbuster (BLOKA) announced earlier this year that it plans to close 500 to 545 stores in 2010. That's in addition to the 374 it closed last year.

Retail Sales Decline Modestly, More Than Forecast

The weakness shows again! Two months in a row! Ouch!

Even this figure is probably inflated for three reasons:

1. Sales tax revenues are still declining. If retail sales were improving, sales tax revenues should be rising. They're not!
2. The survey is skewed toward businesses that have survived. What about all those businesses that didn't? The sales of other companies have parasitized those that have gone belly up. If those businesses had been counted, sales figures would have been considerably lower.
3. States have increased their sales tax. If revenues are falling even in the face off higher rates, then retail sales are really improving, are they?

from WSJ:

U.S. retail sales tumbled a second straight time in June, falling more than expected in a sign consumer spending is slowing and draining steam from an economy saddled with high joblessness.
Sales decreased 0.5%, the Commerce Department said Wednesday. Economists surveyed by Dow Jones Newswires had forecast a 0.3% decline.

Retail Sales Gloom Along With Consumer Confidence

What a shift from yesterday:

NEW YORK (MarketWatch) -- June's retail sales proved less than inspiring.

Deep discounts ruled, as retailers tried to sell through summer gear to prepare for fall merchandise (hello, it's July -- we don't need sweaters yet) and there are concerns that the second half of the year could be difficult.
It looks like economic gloom has overtaken the consumer.
The results from June aren't terrible, 44% of retailers beat Wall Street's targets, although 56% of them missed. Overall, sales rose 3.1%, slightly below the average expectation of 3.2%, according to Thomson Reuters.


also:

Confidence among U.S. consumers sank more than forecast in June and employment fell for the first time this year, reflecting a drop in federal census workers and a smaller-than- forecast gain in the private sector, the Labor Department said July 2. Sales of new homes plunged in May to a record low.

Consumer Concerns

“Economic growth and consumer spending are slowing at a troubling time for U.S. retailers who are staring at a long string of more difficult comparisons once they get by July’s easy 4.7 percent drop” a year earlier, Perkins said.

Soft Retails Sales Put Stocks in Bad Mood

WASHINGTON (MarketWatch) -- U.S. retail sales declined for the first time in eight months in May, tumbling a surprising 1.2%, the Commerce Department estimated Friday. 

Seasonally adjusted sales were mixed across sectors, dominated by large declines at hardware stores, auto dealers, gas stations, department stores and clothing stores. Modest gains were found in most other types of stores.
The results were much worse than expected, as economists surveyed by MarketWatch were forecasting a 0.2% gain in sales. It was the first decline in sales since September 2009; the seven-month winning streak was the longest since 1999
The disappointing results are sure to provoke more talk about a possible double-dip recession following on the heels of the past week's discouragingly weak payrolls report for May. Read the economic preview.
Consumers face many constraints on spending, chiefly weak income growth against a very weak labor market. Credit is tight, and household wealth is likely falling again in the second quarter.

WASHINGTON (AP) -- Retail sales plunged in May by the largest amount in eight months as consumers slashed spending on everything from cars to clothing. The big drop raises new worries about the durability of the economic recovery.
The Commerce Department says that spending fell 1.2 percent last month. Auto sales were down 1.7 percent but there was weakness in a number of areas. Excluding autos, sales fell 1.1 percent.
The big decline cast new doubts about the strength of the economic recovery. Consumer spending accounts for 70 percent of total economic activity. Economists are concerned that households will start trimming outlays as they continued to be battered by high unemployment and a swoon in stock prices.

Double Dose of Bad Economic News

from WSJ:
U.S. retail sales fell in December unexpectedly, signaling restraint by consumers during the holidays as the economy wrestles with high unemployment.
Meanwhile, the number of U.S. workers filing new claims for jobless benefits unexpectedly increased last week, but a drop in the four-week moving average to its lowest level since August 2008 showed claims are still trending downward. Total claims lasting more than one week, meanwhile, decreased.

Will the stock market shrug it off? Consider it shrugged!

Retail Sales Down Even With "Cash for Clunkers"

The futures were up 100 points on the Dow, but gave up all their gains following this news.

from WSJ:

Stocks struggled to stay in the black on Thursday as a round of downbeat economic data cooled the previous trading session's investor euphoria.

Major indexes have swung between gains and losses since the opening bell. Gains in the financial sector and commodity-related stocks have kept the market on an even keel.

The Dow Jones Industrial Average, which leapt 120 points on Wednesday, was recently up 30 points, or 0.3%, at 9391.46, helped by a 4.7% gain in component Bank of America. Wal-Mart Stores was up 1.7% after saying its earnings last quarter were flat as same-store sales slid. But the discounting giant boosted its earnings outlook.

The Commerce Department said retail sales fell 0.1% in July despite the debut of the government's "cash for clunkers" program meant to jump-start auto sales. Demand for goods aside from cars took a large tumble, with steep declines for housing-related retailers and electronic stores.

In other economic reports out on Thursday, initial jobless claims rose marginally last week and import prices fell in July on lower energy prices.

The reports come at a time when investors have generally been in an upbeat mood thanks to a better-than-expected earnings season. But many participants are also looking for a new catalyst to emerge to keep the market's summer rally going into the fall.

Stock Futures Rise On Mixed Data

Retail sales were even more dismal that forecast, but new jobless claims were less than expected.

Retail Sales Slow

July 25 (Bloomberg) -- Sales growth lagged behind profits as companies in the Standard & Poors’ 500 Index beat analysts’ estimates this week, a signal that economic recovery may be slow.

Second-quarter revenue at Caterpillar Inc. and Freeport- McMoRan Copper & Gold Inc. tumbled more than 30 percent from a year earlier, though earnings topped the average of analysts’ predictions. Amazon.com Inc.’s profit skidded and sales missed estimates. United Parcel Service Inc.’s sales slid 17 percent. Microsoft Corp. saw annual sales drop for the first time in 23 years as a public company.

“The economy is coming back but it is not going to come roaring back,” said Mark Zandi, chief economist at Moody’s Economy.com. Companies “are going to be reluctant to add investment and jobs until they get better sales.”

Retail Sales Worsen

from Reuters:
Sales at U.S. retailers fell for a second straight month in April, pulled down by sluggish gasoline and electronic goods purchases, government data showed on Wednesday.

The Commerce Department said total retail sales slipped 0.4 percent after falling by a revised 1.3 percent in March, previously reported as a 1.2 percent drop.

Retail Sales Slump Twice the Forecast Amount

Retails sales for November have been revised downward, and retail sales for December were also worse than anticipated, reflecting an even worse scenario than analysts had expected. Retail sales for December were down 2.7%. Chain store sales were down a staggering 9.8%, the largest drop on record. Does the bad news never end? Stock futures are reflecting the dour news. Folks, we may yet again test the lows from last November! Key support on the S&P 500 is around 850.

Here is a good summary by Marketwatch.

A Little Good News Today

Following the disappointment of Wal-Mart's earnings and sales announcements this morning, other news has helped to put a floor -- at least temporarily -- under the stock index futures. Target reported that their sales slumped only half of the expected amount.

Additionally, the U.S. government reported that new jobless claims were less than expected. However, this data is somewhat suspect, because yesterday, the government also reported that the telephone lines (for people to call in their new jobless claims) crashed because they were so overwhelmed from people calling in to place new unemployment claims. This can only be a very negative sign.

Good Black Friday Retail Numbers, But...

Black Friday's retail sales numbers looked good, so why are stocks slumping today? The headline figure, showing a healthy increase over last year's numbers, looked great. However, the devil is in the details, and they show some rather dour internals. It isn't my purpose to review them here (too busy trading), but many shoppers indicated in surveys that they have alread completed all their holiday shopping. (I am one of those. I finished shopping more than a week ago. However, I've always tried to complete my Christmas shopping list before Thanksgiving.) Furthermore, retailers have slashed their prices so far already that margins are terrible.