Why Retail Stocks Fell Today
Retail stocks were slipping today as two separate pieces of news weighed on the sector. First, the coronavirus outbreak continued to spread, with the World Health Organization declaring a global health emergency as the death toll surpassed 200. Meanwhile, several airlines suspended all of their flights to China, and the U.S. State Department warned against travel to China.
Retailers are sensitive to the Chinese economy, since almost all of them depend on China as a manufacturer for everything from apparel to furniture to electronics, and the outbreak has the potential to upset that supply chain and delay shipments. It could also further depress visits from Chinese tourists. Separately, Amazon (NASDAQ: AMZN) shares surged today after the company turned in a better-than-expected earnings report for the holiday quarter, showing that the company continues to take market share from brick-and-mortar operators and the bifurcation between offline and online retailers seems to be accelerating.
As a result, the S&P SPDR Retail ETF (NYSEMKT: XRT) closed down 3% on Friday, while the S&P 500 was down 1.8%, showing the impact of the coronavirus news. Among retail stocks that fell today were Macy's (NYSE: M), Nordstrom (NYSE: JWN), and Gap (NYSE: GPS), whose shares ended the day down 5.2%, 4.7%, and 3.9%, respectively.
Source Fool.com
