Page 42 - min.soc 9 jan,2016

A24
BUSINESSSaturday 9 January 2016
Wall Street ends worst week since 2011 A stronger JC Penney emerges
MARLEY JAY
AP Markets Writer
NEW YORK (AP) — A
wave of late selling pum-
meled U.S. stocks Friday
and pushed the market to
its worst week in four years. average dropped 167.65
The dismal start to the new
year comes as investors
worry that China’s huge
economy is slowing down.
That has helped send the
price of oil plunging to its
lowest level since 2004, the
latest blow to U.S. energy
companies.
Trader Jeffrey Vazquez works on the floor of the New York Stock Exchange, Thursday, Jan. 7, 2016.
A wave of late selling pummeled U.S. stocks Friday and pushed the market to its worst week in
four years.
Industrial and technology
companies such as Boeing
and Apple that do a lot of
business in China have also
fallen sharply this week.
Mining companies such
as Freeport-McMoRan
plunged as copper prices
have fallen. China is a ma-
jor importer of copper.
Stocks started the day high-
er, driven in part by news of JPMorgan Chase lost $1.35,
an encouraging burst in hir-
ing last month by U.S. em-
ployers.
China’s stock market also
rose 2 percent overnight,
recovering somewhat af-
ter steep drops earlier in
the week triggered trading
halts.
Indexes wavered between
small gains and losses for
most of the day, but took
a decisive turn lower in the
last hour of trading. That
made this the worst week
since September 2011,
when the market was roiled
by the fight over the U.S.
debt ceiling and Standard
& Poor’s move to cut the
credit rating of the U.S.
government.
The Dow Jones industrial
points, or 1 percent, to
16,346.45. The Standard &
Poor’s 500 index fell 21.06
points, or 1.1 percent, to
1,922.03. The Nasdaq com-
posite index shed 45.80
points, or 1 percent, to
4,643.63.
The Dow and S&P 500 are
each down about 6 per-
cent for the week. The Nas-
daq composite fell even
more, 7.3 percent. That
index is heavily weighted
with technology and bio-
tech companies, both of
which were high-fliers last
year.
The largest losses on Friday wage growth and limited
went to financial stocks.
or 2.2 percent, to $58.92
and Citigroup fell $1.43, or rates. In December the Fed
3 percent, to $46.13. Health raised rates for the first time
care stocks slumped, led
by drug companies. En-
ergy stocks also skidded as
the price of oil, already at ries about China’s econo-
decade lows, continued to
fall.
European stocks also
rose early in the day, but
couldn’t hang on. The FTSE
100 index of leading British still growing, that growth
shares declined 0.7 percent
while Germany’s DAX lost
1.3 percent. The CAC-40 in
France slid 1.6 percent.
from this year’s holiday season
The same pattern held in
the U.S. In its monthly jobs A. D’INNOCENZIO
report, released before the AP Retail Writer
stock market opened, the NEW YORK (AP) — Talk about a comeback.
Labor Department said U.S. J.C. Penney reported a 3.9 percent increase in com-
employers added 292,000 parable-store sales during the holiday.
jobs in December, far more It was a reversal of fortunes this crucial selling sea-
than economists had fore- son, with the usually resilient Macy’s reporting late
cast. Wednesday that sales in stores open at least a year
That’s the latest sign the U.S. slumped 5.2 percent between November and De-
economy is still growing. On cember. Macy’s is now cutting up to 4,800 jobs, re-
average employers added organizing operations and closing 40 stores. It also
284,000 jobs per month in slashed its profit outlook.
the fourth quarter, the best Macy’s estimated that 80 percent of its decline was
rate in a year. weather-related. J.C. Penney said warm weather did
Michael Fredericks, portfo- cut into clothing sales but there were other strong
sellers that offset that weakness.
Gap reported sales for December that showed its
continued struggles. The San Francisco-based chain,
which operates stores under its namesake, Old Navy
and Banana Republic, registered a 5 percent drop
(AP Photo/Richard Drew) in revenue at stores opened at least a year. The de-
clines were across all divisions, including Old Navy,
lio manager for BlackRock which has recently been a bright spot for the com-
Multi-Asset Income Fund, pany.
said the labor market is Marvin Ellison, who took over as J.C. Penney CEO last
healthy and wages could August, said that the company strived to improve its
improve this month. online business. It now has 250 stores that are help-
“These are unusually strong ing to fulfill online orders as it plays catch up to other
job creation numbers,” he retailers. It also focused on store-label brands and im-
said. proved its selection of gifts for the holidays.
Fredericks said the low Those were strong numbers for the Plano, Texas re-
tailer, which is nearly three years into a turnaround
inflation will make the Fed- effort following a disastrous attempt to reinvent the
eral Reserve proceed cau- brand under former Apple executive Ron Johnson.
tiously as it raises interest The changes put into place under Johnson resulted
in massive losses and plummeting sales.
Still, J.C. Penney has a long way to go before it can
in nine years, but interest claim a full recovery. The company is expected to
rates are still very low. post annual revenue of $12.6 billion for this fiscal year,
Throughout the week, wor- up nearly 3 percent from the previous year. That’s
remains far from the nearly $18 billion in annual rev-
my and shocks to its mar- enue the company once booked.
kets have canceled out Macy’s had been a stellar performer since the reces-
positive news from the U.S. sion, but over the past year or so has seen its sales
and Europe. growth slow. Profits are under pressure because of in-
While China’s economy is vestments in new businesses and discounts the retail-
er has been forced to offer because of weak sales.
isn’t as fast as it has been. The Cincinnati company has blamed its woes on a
That could hurt sales of ev- shift in consumer spending, with Americans dishing
erything from iPhones to oil out more money on nights out or vacations, and less
and heavy machinery.q on clothes. Among other retailers that reported holi-
day sales was Signet Jewelers Ltd., which reported
that comparable-store sales rose 4.9 percent for the
eight-week period ended Dec. 26. That compared
with an increase of 3.6 percent in the prior year.
Ken Perkins, president of Retail Metrics, a research
firm, said that despite positive results from some stores,
he’s still cautious about the fourth-quarter for retail-
ers. He now expects quarterly profits to rise 0.1 per-
cent, down from growth of 5 percent three months
ago, as more retailers are forced to slash prices.
“While sales may look good, it came at the expense
of margins,” he said.
J.C. Penney, Macy’s and other major retailers report
fourth-quarter results next month.
J.C. Penney’s shares rose 26 cents, or nearly 4 per-
cent, to $7.26 Thursday. Its shares have fallen 8 per-
cent over the past year. Macy’s shares got a bump
Thursday, rising more than 2 percent, or 74 cents, to
$36.89. Macy’s shares have fallen more than 40 per-
cent in the past 12 months. q