NEW YORK —
Investors blamed the weather, and rightly so. Many companies, particularly retailers, said winter storms of the past two months dramatically impacted their business. Macy’s said that at one time in January, 30 percent of its stores were closed because of inclement weather.
Home Depot had a similar story.
“We don’t like to use weather as an excuse but we think we probably lost $100 million in the month of January,” Home Depot’s chief financial officer, Carol Tome, said in a conference call with investors this week. “Atlanta was frozen, for example. It was tough here.”
Even with the economic concerns, investors were able to set aside the volatility of January for three reasons, market watchers said.
First, corporate earnings for the fourth quarter overall turned out to be pretty good. Earnings at companies in the S&P 500 index grew 8.5 percent over the same period last year, according to FactSet. Revenue growth also picked up, albeit slightly.
The Federal Reserve, once again, also came to the market’s side. Janet Yellen, who in February took over the role as chair of the Federal Reserve, reaffirmed that the central bank plans to keep its market-friendly, low interest rate policies in place for the foreseeable future.
Lastly, weather, by its very nature, is temporary.
Spring will come, at some point, and the winter storms that have kept businesses closed and consumers away from stores will fade, investors say. All that pent-up demand will help the economy recover some of the ground lost in January and February.
“I think 70 percent, 80 percent, of the weakness we saw in January and February was weather related and we will pick up strength in the spring thaw,” said Bob Doll, chief equity strategist at Nuveen Asset Management.
Investors will have less information to work with in March than they did in February.