The nation's retailers slashed prices further Wednesday in hopes that a post-Christmas shopping rush will salvage holiday sales that, so far, have fallen below even modest expectations. In particular, they are waiting for legions of shoppers armed with gift cards to snap up bargains and buy fresh new merchandise that just hit store shelves.
Merchants in past years have received a late bounce during big clearance markdowns, and they find themselves again in the position of hoping that bargain-hunting consumers will come through in the end. Gift card sales are not recorded until shoppers redeem them.
Investors, however, grew pessimistic about this holiday season as well as the financial well-being of consumers in a challenging economic environment. Shares of most retailers fell Wednesday, led by Macy's Inc. which sank as much as 5 percent in afternoon trading.
The International Council of Shopping Centers said Wednesday that same-store sales, or sales at stores opened at least a year during the November-December period, are coming in just below already slim projections for a 2.5 percent gain, though it said that a post-Christmas buying splurge could erase that shortfall. That contrasts a more upbeat assessment from its chief economist, Michael P. Niemira, who predicted after the weekend's spending surge that holiday sales could at least meet forecasts.
Stocks fizzle:Stocks finished largely flat Wednesday as investors returned from the Christmas holiday to news of weaker-than-expected retail sales. A jump in oil prices also concerned Wall Street.
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Reports released alongside Christmas proved disappointing. Target Corp. indicated its sales may have fallen in December, while MasterCard Inc. said holiday spending - including credit, cash and checks - climbed a modest 3.6 percent between Thanksgiving and Christmas, weighed by a slowdown in sales of women's apparel. That compares with a rise of 6.6 percent during the same period last year. The 2007 holiday figure is at the low end of its 3.5 percent to 4.5 percent range. Excluding gasoline and auto sales, that figure was 2.4 percent.
The news could raise concerns about the strength of consumer spending and, in turn, the economy. But, it has been widely expected that holiday sales would be slow.
A report that U.S. home prices fell for the 10th consecutive month in October also appeared to limit stocks' gains.
Homes down:U.S. home prices fell in October for the 10th consecutive month, posting their largest drop since early 1991, according to a key index released Wednesday.
The record 6.7 percent slide in the Standard & Poor's/Case-Shiller home price index also marked the 23rd consecutive month that prices either fell or grew more slowly than the month before.
Oil jumps:Oil prices jumped Wednesday on supply concerns, stoked by a new round of Turkish airstrikes in northern Iraq and a growing belief that domestic oil inventories fell last week.
Turkey's military said its warplanes bombed eight suspected Kurdish rebel positions in northern Iraq on Wednesday. It was the third Turkish strike inside Iraq in less than two weeks. Oil traders worry that the rebels could cut oil supplies from Iraq in retaliation.
The new attacks came as oil investors awaited inventory data from the Energy Department's Energy Information Administration. It is expected to show crude supplies fell by 1.3 million barrels last week, the sixth straight weekly decline.
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- Associated Press
