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Stocks slip; Kate Spade shares mauled

Tuesday, August 12, 2014 - 02:24

Summary: U.S. stocks dip with investors skeptical about Russian movement toward Ukraine; Kate Spade shares slump 25 percent after margin warning; King Digital sales, outlook anything but sweet. Conway G. Gittens reports.

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CORRECTED VERSION FIXES INCORRECT SPELLING AND SAYING OF ANALYST'S NAME. CORRECT NAME IS MARY ROSS GILBERT NOT MARY ROSE GILBERT PLEASE NOTE: THIS EDIT CONTAINS CONVERTED 4:3 MATERIAL This video of a convoy of 280 trucks heading from Russia toward Ukraine - putting global markets on edge. Even though Russia says the trucks are bringing humanitarian aid - some are worried The Kremlin may be laying the groundwork for a later invasion. In the U.S., those fears ebbed a little by the end of the session, leaving Wall Street slightly negative for the day. But in Europe - stocks were down across the board. Adding to the slide, German investor morale tumbled to the lowest since December 2012 on fear of the economic blowback from the tensions between Ukraine and Russia. On the company front: Shares of Kate Spade trampled on the floor like a cheap dress at a sample sale. The handbag and accessory maker warning that the amount of money it will make per sale will be down this year due to increased competition. Weak sales at its cheaper Kate Spade Saturday brand aimed at younger shoppers - also a problem. The affordable luxury segment is showing signs of strain, but fashionistas are sticking better with Kate Spade than rivals Michael Kors and Coach, says Imperial Capital's Mary Ross Gilbert. SOUNDBITE: MARY ROSS GILBERT, MANAGING DIRECTOR, IMPERIAL CAPITAL (ENGLISH) SAYING: "I think what you're starting to see is customer say 'well, what is new out there' and I think they are finding it with Kate and they are not finding it with Coach, that's sort of been a drift away and even with Michael Kors -it's becoming very commonplace and there's nothing so exciting that they can't wait to have." But the entire group - put on the sales rack. Shares of Kate Spade losing one-fourth of their value in historic volume. Shares of Kors down more than three percent and Coach shed half of a percent. Expect King Digital, maker of Candy Crush Saga, to be a major loser on Wednesday. After the close, the social gaming company announced sales below the consensus and cut its outlook for the year as its aging blockbuster brings in less eyeballs and less cash. The stock tumbled at least 22 percent after the earnings announcement. New data from Labor Department confirm the jobs market is on a slow, yet steady recovery. New hiring climbed 3-1/2 percent in June, while the number of job openings ticked up to 4.7 million, more Americans are quitting their jobs in order to get a new one and that's seen as a sign of confidence. Some economists say higher wages should soon follow.

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Stocks slip; Kate Spade shares mauled

Tuesday, August 12, 2014 - 02:24