Dive Brief:
- The stocks of major retailers took a plunge on Monday as the Dow Jones Industrial average fell over 1,000 points at the opening bell, then shot back up again, and ultimately closed down more than 580 points, a loss of about 3.5%.
- Most retail stocks mirrored the market trends on Tuesday. Wal-Mart was down 3.89% at closing bell, Target was down 3.98%, and Costco was down 4.33%. Some outliers in the retail market included Amazon, which was down 6.29%, and Apple, which was only down 2.32%.
- UPDATE: On Wednesday, retail stocks seem to have bounced back, along with the rest of the market. The Dow Jones Industrial average was up 1.99% about 30 minutes after opening bell. Wal-Mart was up 2.06%, Target up 1.67%, and Costco up 2.03%.
- Tuesday's news came at a tough time for retailers, analysts told CNBC, as the volatility could have had the potential to impact holiday spending while many businesses have already placed their orders for the season.
Dive Insight:
The National Retail Federation, the major trade group for retailers, seemed to have some prescience in its decision to remain optimistic Tuesday, even while speculation abounded around what impact the market's turbulence could have on consumer spending. The trade group's chief economist, Jack Kleinhenz, told CNBC that he was "confident" the market turmoil wouldn't lead to another recession, and called the movement an "overreaction to fears of global slowdown."
It's "too soon to make any changes to the near-term outlook for U.S. economic growth and consumer spending," Kleinhenz told CNBC. "We are carefully watching the markets and like everyone else are waiting to see the smoke clear."
Tuesday's activity came as many retailers recently lowered their earning forecasts for the year during their latest financial reports. Wal-Mart lowered its full-year forecast last week, citing investments in its workforce and e-commerce, while Macy's did the same, expecting total sales to drop 1% for the year.
