Casual Dining Chains Take Hit

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As investors braced for how significantly a consumer-spending slowdown might affect today’s reports on monthly same-store sales, retailers and restaurant operators helped drive small-caps to a third straight drop, the Wall Street Journal reports.


“The feeling right now is of a recessionary environment. In terms of the access to credit and the economic environment, it feels recession-like,” said Stephen Wood, senior portfolio strategist for Russell Investments.


In the buildup to January sales reports for many retailers, small-cap consumer discretionaries were the largest laggards, led by Blue Nile, off $2.61, or 5%, at $52.59, and Deckers Outdoor, falling 4.93, or 4%, to 109.12.


Restaurant operators also weighed on the market, marked by noticeable declines for IHOP and California Pizza Kitchen, after both companies had their ratings cut by Raymond James. IHOP declined 5.18, or 11%, to 43.08, on the New York Stock Exchange, after it was cut to “underperform” from “outperform”, while California Pizza fell 1.44, or 10%, to 13.16, after being cut to “outperform” from “strong buy.”


The Russell 2000 index of small-capitalization stocks fell 9.09 points, or 1.3%, to 692.49, its lowest close since Jan. 25. The Standard & Poor’s SmallCap 600 slipped 3.79 points, or 1.03% to 365.41, while the Nasdaq Composite Index shed 30.82 points, or 1.33%, to 2278.75.



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