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 November election, including industrial and basic materials companies, also slipped. The Dow Jones industrial average was down as much as 131 points in midsession trading, but the losses eased as shares of companies that pay big dividends traded higher.
Healthcare 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 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," Warne said.
She added that investors are also not sure if Trump's trade and immigration proposals will slow economic growth.
The Dow Jones industrial average fell 42.87 points, or 0.2%, to 19,899.29. The Standard & Poor's 500 index fell 1.75 points, or 0.1%, to 2,269. The Nasdaq composite rose 10.93 points, or 0.2%, to 5,487.94. The Russell 2000 index of small-company stocks dropped 16.02 points, or 1.2%, to 1,371.94.
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 last two years, tumbled 13.9% to $30.86; Kohl's dived 19% to $42.01. Nordstrom and J.C. Penney each sank 7%.
Amazon rose 3.1% to $780.45 as investors interpreted traditional stores' trouble as a sign that the online retail giant is continuing to expand.
Bond prices jumped. The yield on the 10-year Treasury note fell to 2.35% from 2.44%. That sent banks to steep losses, as lower bond yields mean lower interest rates and reduced profits from mortgages and other loans. Citigroup fell 1.7% to $60.34, and Fifth Third Bancorp declined 2.8% to $26.64.
The dollar continued to slip below its recent 14-year highs, falling 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%, to $1,181.30 an ounce. Silver rose 9 cents to $16.64 an ounce. That sent mining companies higher. Newmont Mining climbed 4.6% to $36.57 and Hecla Mining jumped 4.7% to $5.83.
Copper prices fell 2 cents to $2.54 a pound.
Alexion Pharmaceuticals jumped 9.5% to $139.18 after the drugmaker said it won't restate any of its earnings. The company had been examining sales of its drug Soliris, but said that it didn't find improper revenue recognition and that its sales were valid. Alexion did say it found weaknesses in "internal controls." The company began examining its sales practices in November, and the following month its chief executive and chief financial officer left.
Stanley Black & Decker rose 1.6% to $118.35 after the company said it would buy Sears' Craftsman brand for about $900 million. In October the company agreed to buy Newell Brands' tools business for $1.95 billion. Sears shares edged up 0.3% to $10.39.
Halozyme Therapeutics jumped 18% to $12.61 after the San Diego drugmaker said a potential treatment for pancreatic cancer helped patients live longer.
Resources Connection sank 12.5% to $17.20 after the Irvine consulting company, which recently climbed to a five-year high, reported a smaller-than-expected profit.
Toyota Motor slipped 0.6% to $120.44. The automaker was the latest target of Trump's browbeating, over its Mexico production plans.
Benchmark U.S. crude climbed 50 cents to $53.76 a barrel. Brent crude, which is used to price international oils, rose 43 cents to $56.89 a barrel.
Wholesale gasoline fell 1 cent to $1.64 a gallon. Heating oil stayed at $1.69 a gallon. Natural gas rose 1 cent to $3.27 per 1,000 cubic feet.
The FTSE 100 index in Britain inched up 0.1% to another all-time high. The German DAX held steady, and the CAC-40 in France rose less than 0.1%. Japan's benchmark Nikkei 225 index fell 0.4%, and the Kospi of South Korea fell 0.2%. Hong Kong's Hang Seng index rose 1.5%.
2:25 p.m.: This article was updated with closing prices, context and analyst comment.
9:35 a.m.: This article was updated with market prices, economic information and additional context.
9:10 a.m.: This article was updated with more recent market information.