Major US stock indexes are poised for their first losing session of the year today as investors dumped Macy's and Kohl's after both department store giants reported dismal holiday sales.
By Paolo Palazzi-Xirinachs
Thursday, January 5, 2017
Nearing today's market close the Dow Jones Industrial Average was down 0.29% at 19,884.52 points, while the S&P 500 had lost 0.17% percent to 2,266.82. But, the Nasdaq Composite added 0.07% to 5,480.94.
Is the Santa Claus/Trump Effect rally over?
US stocks have wavered over the past three weeks following a strong surge in the wake of the November election, with investors expecting President-elect Donald Trump to stimulate the economy through tax cuts and infrastructure spending - although there are no specifics to either proposed plans. Many on Wall Street seem to want evidence that his campaign-trail promises will be approved by Republican lawmakers and come to fruition.
Holiday sales numbers are trickling in, and it seems they are not going to be good. Department stores Macy's dropped 14% percent while Kohl's slumped 19% after the companies said their holiday sales fell more than expected. Those warning salvos swept up other department stores and the entire sector in their wake. Nordstrom fell 7.9% percent and J.C. Penney fell 6.2%.
Meanwhile, likely culprit and online retailer Amazon.com, which has been eating into the sales of brick-and-mortar retailers for the last decade, rose 2.8%. The stock provided the biggest boost to the Nasdaq today.
The S&P 500 financial index fell 1.3% and was set for its worst day since September, pulled lower by JPMorgan, Wells Fargo and Bank of America. The index has risen about 17% since President-elect Donald Trump won the election as investors bet on his proposals aimed at reducing banking regulations.
Filings for US unemployment benefits declined to the lowest level in eight weeks, showing volatility typical around the holiday period. Jobless claims dropped by 28,000 to 235,000 in the week ended Dec. 31, a Labor Department report showed Thursday in Washington.
While the figures usually show swings around the year-end holidays, firms have generally avoided firings as the job market tightens and the supply of available workers shrinks. Employers probably continued to add staffers at a solid pace last month, analysts estimated ahead of data due Friday from the Labor Department.
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