Chin Up in the Downswing


Chin Up in the Downswing: Dow, Commodities Bouncing Back; Aeropostale Flying High

March 16, 2009 05:45 PM
by Anne Szustek
Wall Street is heading back up, thanks to bank stocks and confidence on the part of the Fed. Commodities are also lending an unexpected boost, and apparel retailer Aeropostale posted strong fourth-quarter numbers.

Banks Lead Wall Street Rally

The Dow continued the rebound it saw over much of last week, largely buoyed by financial sector stocks. The utilities sector was up some 4 percent as of 3 p.m. EDT Monday.

Wall Street closed Monday trading slightly below its opening levels Monday. But the markets’ performance today was mostly positive, due in part to the afterglow of Federal Reserve Chairman Ben Bernanke’s Sunday evening appearance on CBS newsmagazine “60 Minutes.”

Bernanke said the current recession should begin to let up by the end of 2009; however, a recovery would need to be led by financial markets: “The lesson of history is that you do not get a sustained economic recovery as long as the financial system is in crisis.”

Gold Helps Financial Markets Glitter

Commodities, including precious metals, energy and foodstuffs have begun to bounce back and have been an “unlikely ally” to the stock markets, writes CNBC. Gold, silver and copper have generally been showing positive growth over the past few trading sessions. Crude oil, while trading much lower than last year on the back of a strengthening U.S. dollar, has been creeping up near the $50 per barrel mark.

“The constructive thing that we're seeing now is commodity prices are significantly higher,” Art Hogan, managing director at financial firm Jefferies, told CNBC. “That's important and energy as a whole is more important to the S&P than the financials are right now.” In addition, grains appear to be on the rise again after waning enthusiasm over ethanol.

Aeropostale Leaving Its Stamp

Teen-focused apparel retailer Aeropostale posted 17 percent growth in sales during fourth-quarter 2008, totaling out at $690 million. Despite having heavy price markdowns on its merchandise to appeal to budget-conscious shoppers, the mall store chain had 17 percent lower inventory per square foot, and rounded out fourth quarter with zero long-term debt and $222.5 million in cash.

In addition, Aeropostale is planning to launch a mid-priced children’s diffusion line. Aeropostale’s price per share finished the quarter at $1.01, marking a 5 percent increase.

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