[1/5/17] 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.
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.
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.