By WSJ City
Shares of department stores, discount chains and even toy makers rallied Tuesday after the U.S. said it would delay some tariffs against China until Dec. 15 on items including toys, cellphones, laptop computers that had been set to take effect Sept. 1.
--- Best Buy, Dollar Tree and Kohl's rallied 6.5%, 4% and 2.9% respectively.
--- Toy makers Mattel and Hasbro jumped 4.6% and 2.8% respectively.
--- The SPDR S&P Retail exchange-traded fund has slumped 21% over the past 12 months.
--- S&P 500 rose 3.7% in that span. Some analysts and investors anticipate the relief rally may prove to be short-lived.
"In the short run, volatility will likely continue for retailers just because a lot of trade uncertainty still exists. The fear of the unknown is often times worse than the eventual reality, and companies are still unsure of how the tariffs could impact the supply chain for consumer goods."
Eric Marshall, portfolio manager, Hodges Capital Management
Why This Matters
The tariff delay comes as welcome news for retailers, which have been caught in the crosshairs of the US-China trade spat. Retail stocks have been punished over the past year as companies have tried to grapple with increased tariffs on goods from China. And declining foot traffic has also continued to weigh on retailers as shoppers continue to shift to online e-commerce giants such as Amazon.
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