U.S. retailers rebound sharply, boosted by market
August 25, 1998 02:56 PM
CHICAGO, Aug 25 (Reuters) - Shares of most U.S. retailers posted solid gains Tuesday, helped by a broad market rally after underperforming the market recently, industry analysts said.
"The market's up and these guys had been underperforming for a bit," retail analyst Joseph Ronning at Brown Brothers Harriman said.
After outperforming the market through much of the year, many retail stocks succumbed to heavy profit-taking recently, before bouncing back somewhat on a string of solid second quarter earnings results.
On Tuesday, gains were posted across the retail sector, led by industry leaders including Sears, Roebuck and Co. S , which gained 1-3/4 to 54-11/16, Wal-Mart Stores Inc. WMT , which rose 1-7/16 to 68-11/16 and Dayton Hudson Corp. DH , which rose 1-15/16 to 48-9/16.
Among specialty merchandisers, electronics retailer Best Buy Co. Inc. BBY gained 1-3/4 to 52-1/2, home improvement retailer Home Depot Inc HD rose 1-1/8 to 45-1/8 and discounter Dollar Tree Stores Inc. DLTR added 1-1/16 to 38-11/16.
"They're rebounding with the market, but also I think a lot of investors look at retail as a safe port in the storm," said industry analyst Peter Schaeffer at Warburg Dillon Read.
"They're insulated from Asia better than almost any other category, sales have held up pretty well and the earnings reports have been good," he said.
Even apparel merchant Gap Inc. GPS , which was downgraded by PaineWebber to attractive from buy, was swept up in the sector rally. Gap shares were up 1/16 at 66 after falling to 63-7/8.
((Chicago equities news, 312 408 8787, chicago.equities.newsroom@reuters.com))
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