The S&P 500 retailing index and Amazon hit fresh record highs on Friday as Americans took to the stores and hit websites to snap up ‘Black Friday’ bargains, handing the US equity market its biggest weekly gain since early October.
The S&P 500 retailing index climbed 0.7 per cent to close at a record high of 1,655 points while ecommerce juggernaut Amazon’s shares rallied 2.5 per cent to end the day at $1,184.8.
Amazon has now gained over 57 per cent this year, lifting its market capitalisation to $569bn.
Department store Macy’s was also a notable gainer, advancing as much as 4.3 per cent before settling for a 2 per cent rise on the day, as chief executive Jeff Gennette told CNBC that he expected robust Black Friday sales this year.
The holiday selling season is off to a “strong start,” Mr Genette told the broadcaster, but stressed that “we have a five-week marathon ahead of us”.
The rally for retailers came as preliminary data showed that Black Friday was off to a strong start with $640m in online spending as of 10am in New York on Friday, up 18.4 per cent from a year ago, according to Adobe Digital Insights. That followed $2.87bn in online spending on Thanksgiving itself, up roughly 18 per cent from a year ago.
The fourth quarter is the most critical for retailers as consumers boost spending around the holidays.
The buzz surrounding Black Friday, the day after Thanksgiving that traditionally marks the start of holiday shopping, also help push shares in Kohl’s higher by about 1 per cent to $45.10 and JC Penney shares gained 0.6 per cent to $3.26.
Gap was also among the risers on the S&P 500, up almost 1.5 per cent to $29.60, Abercrombie & Fitch shares rose 0.7 per cent to $16.73 and American Eagle Outfitters climbed 1.3 per cent to $14.83.
The National Retail Federation estimates that 164m people — or 69 per cent of Americans — plan to shop over the holiday weekend that began on Thursday and wraps up after “Cyber Monday”.
They also project sales to rise between 3.6 to 4 per cent over the November-December holiday period compared with a year ago.
Retailers are hoping for such a bump as they continue to face declining mall traffic and increased competition from online competitors. In order to shore up their bottom lines, companies have also worked to tighten inventory and reduce promotions.
However, Friday’s optimism could be checked in coming weeks and months as last year the bulk of department stores and retailers reported holiday sales that were ultimately shy of analyst estimates.
After suffering two consecutive weekly losses for the first time since the summer, the US stock market returned to winning ways this week, notching up a gain of nearly 1 per cent gain — its best performance since early October — despite the Thanksgiving holiday limiting trading to three and a half sessions.
Technology stocks were the biggest drivers of the S&P 500’s 0.2 per cent gain on Friday — when trading ended at 1pm in New York — rallying 0.5 per cent over the course of the holiday-shortened trading session.
Mamta Badkar and Robin Wigglesworth
