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Gap Reels From Sales Slump As the Dow Rallies 146 Points

John Divine
April 14, 2014

After a brutal sell-off sent the Dow Jones Industrial Average (DJINDICES: ^DJI) plunging more than 2% last week, a manner of calm was restored to the stock market today. March U.S. retail sales topped estimates, gaining 1.1% from February, as severe winter weather abated and consumers rushed outside with their wallets to welcome the spring. Shares of Wal-Mart (NYSE: WMT), Gap (NYSE: GPS), and Melco Crown Entertainment Limited (NASDAQ: MPEL) each ended the day as notable movers, as the Dow added 146 points, or 0.9%, to end at 16,173. 

Wal-Mart added 1.2% today, outperforming many of its blue chip peers on the back of retail's resurgence. Wal-Mart's massive presence in the U.S. -- it's the country's largest private employer with nearly 1.4 million Americans on its payroll -- means macroeconomic trends in retail are good leading indicators for the company's domestic revenue. Although auto sales contributed significantly to last month's retail gains, strong sales in both general merchandise and clothing & accessories are doubtlessly positives for the $250 billion behemoth. 

The Gap owns brands like Old Navy and Banana Republic. Source: Wikimedia commons

While March's numbers bode well for the economy and the largest retailers in the land, macro trends don't translate as well to smaller companies in the same space. Gap proved this definitively late last week, when it reported that same-store-sales fell 6% year-over-year in March. Shares fell 1.6% today, as investors saw the impressive domestic