US stocks slump as banks slump and department stores dive

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January 5, 2017 – NEW YORK (AP) — Stocks are slumping Thursday as interest rates drop and banks take sharp losses.

Department stores and mall operators are tumbling as Macy’s and Kohl’s both plunged following weak holiday-season reports that led the chains to cut their profit forecasts. Macy’s also said it will eliminate 10,000 jobs as it continues to close stores.

KEEPING SCORE: The Dow Jones industrial average sank 109 points, or 0.5 percent, to 19,832 as of 12:12 p.m. Eastern time. The Standard & Poor’s 500 index lost 9 points, or 0.4 percent, to 2,262. The Nasdaq composite slid 8 points, or 0.1 percent, to 5,488. The Russell 2000 index of small-company stocks surrendered 21 points, or 1.5 percent, to 1,366.

FIRE SALE: Macy’s and Kohl’s reported declines in a key sales measure for November and December. Macy’s said it will restructure its business, sell properties and continue to close stores.

Macy’s, which has lost about half its value over the last two years, tumbled $4.93, or 13.8 percent, to $3.091 and Kohl’s slumped $10.32, or 19.9 percent, to $41.56. Competitor Nordstrom gave up $4.34, or 8.9 percent, to $44.59 while J.C. Penney dropped 56 cents, or 6.6 percent, to $7.92.

SEARS RISES AGAIN: Sears jumped after it said it will sell the Craftsman brand to Stanley Black & Decker for $900 million. Sears will also get a percentage of Craftsman sales over the next 15 years and it will continue to sell the products at its stores. That gives Sears another raft of cash, and its shares climbed 43 cents, or 4.2 percent, to $10.79. Last Thursday the company’s stock rose 10 percent after Sears said it secured new financing that will help fund its operations.

Sears also said it will close another 150 stores. Investors rarely see that kind of announcement as a positive, but they’ve long expected such a move. Stanley Black & Decker gained $1.37, or 1.2 percent, to $117.85. In October the company agreed to buy Newell Brands’ tools business for $1.95 billion.

 
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Online retail giant Amazon rose $18.05, or 2.4 percent, to $775.23 as investors felt the continued trouble for traditional stores shows Amazon is succeeding.

BRICK, MORTAR, TEARS: The struggles for department stores also hurt real estate investment trusts that operate and develop shopping malls. Simon Property Group dropped $2.09, or 1.1 percent, to $181.99 and General Growth Properties lost 41 cents, or 1.6 percent, to $25.57.

BONDS: Bond prices jumped. The yield on the 10-year Treasury note fell to 2.36 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 $1.32, or 2.1 percent, to $60.09 and Wells Fargo lost $1.26, or 2.2 percent, to $54.79.

CURRENCIES: The dollar continued to slip below its recent 14-year highs. It fell to 115.41 yen from 117.60 yen. The euro rose to $1.0599 from $1.0467.

The price of gold jumped 1.5 percent and silver picked up almost 1 percent. That sent mining companies higher. Newmont Mining gained $1.76, or 5 percent, to $36.72 and Hecla Mining rose 26 cents, or 4.8 percent, to $5.84.

ADVISE AND CONSENT: The technology information and analysis company Gartner said it will buy advisory company CEB for $2.6 billion in cash and stock. CEB jumped $13.05, or 21.1 percent, to $74.95 while Gartner gave up $8.77, or 8.6 percent, to $93.02.

PAYROLL REPORT: Private U.S. companies added only 153,000 jobs in December, according to payroll processor ADP. That total was a bit lower than analysts expected and slightly slower than the pace of hiring for the rest of 2016.

 
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ENERGY: Benchmark U.S. crude shed an early gain and fell 10 cents to $53.16 a barrel in New York. Brent crude dipped 10 cents to $56.39 a barrel in London.

OVERSEAS: The FTSE 100 index in Britain inched up 0.1 percent to set another all-time high. The German DAX held steady CAC-40 in France rose less than 0.1 percent. Japan’s benchmark Nikkei 225 index fell 0.4 percent and the Kospi of South Korea edged 0.2 percent lower. Hong Kong’s Hang Seng index rose 1.5 percent.

 
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