By Andria Cheng
Retail stocks headed higher Tuesday as Macy's Inc. (M) was
upgraded to buy from hold by Citigroup. Lowe's Cos. (LOW) dropped
after the No. 2 home-improvement retailer gave profit forecasts
that may fall short of Wall Street expectations.
The S&P Retail Index rose 0.6% to 388.04, a day after the
Conference Board reported that its index of leading economic
indicators rose for the fifth consecutive month. The Federal
Reserve also kicks off a two-day meeting Tuesday.
Lowe's was among the few decliners, with its stock down 1.1% to
$21.69. The home-improvement retailer on Tuesday kept its profit
forecast for this year and gave an outlook for next year that may
fall short of Wall Street expectations even as it expects to gain
market share.
Shares of its larger rival, Home Depot Inc. (HD), were up
slightly.
Macy's shares rose 4.8%. Analyst Deborah Weinswig said the
company's My Macy's initiative to target local markets continues to
gain traction and should lead to improved sales and margin trends
ahead, particularly beginning in 2010. Declining product costs also
could lift gross margin by half a percentage point next year, she
said. The analyst raised her 2009 to 2011 profit estimates and
doubled her price target on the stock to $30.
Buckle Inc. (BKE) shares rose 3.5%. The teen retailer said its
board authorized a $1.80 per share special one-time cash dividend
to be paid to shareholders of record as of Oct. 15. The board also
authorized a 20-cent per share regular quarterly dividend to be
paid to shareholders of record as of Oct. 15. Both the special
one-time cash dividend and the regular quarterly dividend are
payable on Oct. 27 and will be paid together.
Gymboree Corp. (GYMB) rose 3.5% after the children's clothing
retailer was upgraded to outperform by FBR Capital Markets.
-By Andria Cheng; 415-439-6400; AskNewswires@dowjones.com