Stocks slide on bank, retail losses
NEW YORK — Stocks slipped Thursday as interest rates dropped and banks took sharp losses. Department stores tumbled after weak Christmas- season reports that led the chains to cut their profit forecasts.
The Dow Jones industrial average fell 42.87 points, or 0.2 percent, to 19,899.29. The Standard & Poor’s 500 index dropped 1.75 points, or 0.1 percent, to 2,269. The Nasdaq composite rose 10.93 points, or 0.2 percent, to 5,487.94. The Russell 2000 index of small- company stocks fell 16.02 points, or 1.2 percent, to 1,371.94.
After a solid but uninspiring report on private hiring in December, bond prices jumped and yields fell, which sent bank stocks down. The dollar declined.
Other industries that have climbed since the election, including industrial and basic materials companies, also slipped.
The Dow was down as much as 131 points at midday, but the losses later eased as shares of companies that pay big dividends traded higher.
Stocks have surged in the last two months because investors expect faster economic growth after Presidentelect Donald Trump takes office. Kate Warne, an investment strategist for Edward Jones, said they may be waiting for a while.
She pre di c ted that Trump’s proposed tax cuts and higher infrastructure spending won’t affect the economy much until late this year or early 2018.
The day started with a
mixed report on hiring. Payroll processing company ADP said private U. S. 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 today.
The payroll report “reinforced investors’ concerns that stocks have risen too quickly without policy changes actually taking place yet,” she said. Warne added that investors are also not sure if Trump’s trade and immigration proposals will slow economic growth.
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 past two years, tumbled $ 4.98 to $ 30.86 and Kohl’s slumped $ 9.87 to close at $ 42.01.
Amazon shares rose $ 23.27, or 3.1 percent, to $ 780.45 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 percent from 2.44 percent.
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, or 1.7 percent, to $ 60.34 and Fifth Third Bancorp declined 78 cents, or 2.8 percent, to $ 26.64.
The dollar continued to slip below its recent 14- year highs. It fell to 115.62 yen from 117.60 yen.
The euro rose to $ 1.0590 from $ 1.0467.
With the dollar skidding, the price of gold jumped $ 16, or 1.4 percent, to $ 1,181.30 an ounce.
Silver gained 9 cents to $ 16.64 an ounce.
Benchmark U. S. crude picked up 50 cents to $ 53.76 a barrel in New York. Brent crude added 43 cents to $ 56.89 a barrel in London.