US stocks mostly slip

Associated Press

NEW YORK

Stocks slipped 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.

Health care 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 Trump’s proposed tax cuts and higher infrastructure spending won’t affect the economy much until late this year or early 2018.

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 down economic growth.

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 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 tumbled $4.98, or 13.9 percent, to $30.86. The stock traded above $72 as recently as July 2015. Kohl’s slumped $9.87, or 19 percent, to $42.01. Nordstrom and J.C. Penney both sank 7 percent.

Amazon 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.