Wednesday, thanks to an impulse of 20.34 points. FTSE 100 was also at rise, up by 0.9%, edging off its highs after the release of weak services sector data. Luxury stocks were an important engine for Wednesday trading.
Services output fell 1.2% in April from March--the biggest fall since January 2010. "Given the dominant role of the services sector [it accounts for 75.8% of GDP] this is worrying news for second-quarter GDP growth prospects," says Howard Archer at Global Insight.
In the UK, Burberry rose 5.2 per cent to 1,449p, while Marks & Spencer was the biggest faller in the London Stock Exchange, down 2 per cent to 361.6p. Wednesday was unarguably a good day for luxury brands, seeing Luxottica rising by 3.2%,
Main news Wednesday were about how Macy's, the US retail giant which also operates Bloomingdales, is going to be offering safe shopping online to international customers in the UK and elsewhere, so that overseas sales are available. Last year around eight per cent of the traffic fielded by Macys.com was from international customers, which has led the firm to assume that it could take advantage of this untapped revenue stream by opening its digital doors to those outside of the US.
“International shipping will enable Macy’s to build upon its existing customer base beyond the United States by exposing our product offerings abroad,” said Kent Anderson, president of macys.com, in statement. “In 2010, non-U.S.- based shoppers accounted for 36 million visits to macys.com.” Now they can shop too.
“Retailers were really looking for growth when the economy slowed down. One of the great answers was selling outside of the U.S.,” says Michael DeSimone, CEO of FiftyOne Global, for Forbes. “It’s a much bigger commitment to open a store in foreign country where you’re not operating currently, than to (ship there).”
Still in the US, Lululemon Athletica remained strong, after tacking on more gains to last week's breakout. It climbed 4.52, or 4%, to 113.10. Turnover rose 16% above average. The stock is 10% past a 102.93 buy point from a cup without handle. According to a Reuters report, the yoga apparel retailer expects sales to hit $1 billion in fiscal 2012. The company did $712 million in revenue in fiscal 2011.
Analysts from Zacks Investment Research reminded how one week ago, Gap Inc was downgraded to Neutral from Outperform at Cowen and Company. The stock closed yesterday at $17.93 which is 1.21% lower than the price one-week ago of $18.15. Following their analysis, the American basics chain has a potential upside of 11.5% based on a current price of $17.93 and an average consensus analyst price target of $20.00. They also highlighted that Gap Inc is currently below its 50-day moving average of $20.39 and below its 200-day moving average of $20.64. The company is going ex-dividend on Friday, July 1. The current yield is 2.5%, which is equivalent to $0.45 for the year.