Tuesday’s rally quickly fizzled out as the Dow Jones Industrial Average skidded below the 11,000 point mark again Wednesday, thanks to lingering fears caused by the Federal Reserve’s gloomy economic outlook.
Just four of the 30 footwear stocks tracked by Footwear News traded higher Wednesday, although gains stayed modest on average, below 1 percent.
Twenty-six firms were in negative territory, mostly between 3 and 6 percent, while one, Bakers Footwear Group, finished flat.
Small-cap counter Heely’s Inc was the top gainer, climbing 4.8 percent to close at $2.20. Meanwhile, Kenneth Cole Productions’ market capitalization shrunk the most, by 8.9 percent.
Despite widespread volatility, the industry again outperformed benchmark indices, closing down an average of 3.8 percent.
By 4pm, in comparison, the blue-chip Dow index had lost 4.6 percent, plunging to an 11-month low as investors feared further contagion among European banks, in particular France’s hefty exposure to Greece’s sovereign debt.
The S&P 500 slipped 4.4 percent and the Nasdaq Composite was off 4.1 percent.
Leading the declines were financial sector stocks, with Citigroup falling $3.33, or 10.5 percent, to $28.49; Bank of America off 10.9 percent, to $6.77; and American Express down 7.2 percent to $42.80.
“Most consumer stocks now look undervalued,” observed RJ Hottovy, analyst at Morningstar Inc. For those not put off by the large swings, he advised, “I’d look to the best-in-class names that have some pricing power, some brand power, resources to extend their brand and exposure to emerging markets.”