US stocks slide amid bank losses and department store woes
Stocks on Wall Street slipped on Thursday as interest rates dropped and banks took sharp losses.
Department stores tumbled as Macy's and Kohl's plunged following weak holiday-season reports that led the chains to cut their profit forecasts.
After a solid but uninspiring report on private hiring in December, bond prices jumped and yields fell, which sent banks down. The dollar declined. Other industries that have climbed since the election, including industrial and basic materials companies, also slipped.
The Dow Jones industrial average was down as much as 131 points at midday, but the losses later eased as shares of companies that pay big dividends traded higher.
Healthcare and technology stocks edged higher, and the Nasdaq composite recovered from an early loss to set another all-time high.
Stocks have surged in the last two months because investors expect faster economic growth after President-elect Donald Trump takes office.
Kate Warne, an investment strategist for Edward Jones, said they may be waiting for a while. She thinks Mr Trump's proposed tax cuts and higher infrastructure spending will not affect the economy much until late this year or early 2018.
She said the payroll report "reinforced investors' concerns that stocks have risen too quickly without policy changes actually taking place yet".
The Dow Jones industrial average sank 42.87 points, or 0.2%, to 19,899.29. The Standard & Poor's 500 index lost 1.75 points, or 0.1%, to 2,269. The Nasdaq composite rose 10.93 points, or 0.2%, to 5,487.94. The Russell 2000 index of small-company stocks surrendered 16.02 points, or 1.2%, to 1,371.94.
The day started with a mixed report on hiring. Payroll processing company ADP said private US companies added 153,000 jobs in December.
That was fewer than analysts expected and a bit less than they had in the months before. The government will release its own report on the job market on Friday.
Macy's said it will cut 10,000 jobs, and both it and Kohl's reported declines in a key sales measure for November and December. The job cuts will be part of a restructuring for Macy's that will include selling properties and continuing to close stores.
Macy's, which has lost half its value over the last two years, tumbled 4.98 dollars, or 13.9%, to 30.86 dollars and Kohl's slumped 9.87 dollars, or 19%, to 42.01 dollars. Nordstrom and JC Penney both sank 7%.
Amazon rose 23.27 dollars, or 3.1%, to 780.45 dollars as investors interpreted the latest trouble for traditional stores as another sign that the online retail giant is continuing to expand at their expense.
Bond prices jumped. The yield on the 10-year Treasury note fell to 2.35% from 2.44%. That sent banks to steep losses, as lower bond yields mean lower interest rates and reduced profits from mortgages and other loans.
Citigroup lost 1.07 dollars, or 1.7%, to 60.34 dollars and Fifth Third Bancorp declined 78 cents, or 2.8%, to 26.64 dollars.
Drugmaker Alexion Pharmaceuticals jumped after the company said it will not restate any of its earnings. The company had been examining sales of its drug Soliris, but said it did not find improper revenue recognition and that its sales were valid.
Alexion did say it found weaknesses in "internal controls". The company began examining its sales methods in November, and the following month its chief executive and chief financial officer left. The stock rose 12.07 dollars, or 9.5%, to 139.18 dollars on Thursday.