money is pulling into stocks. bears is turning into bulls is that a warning side for the market. >> big dividends why investors are given one sector a second chance to pay them back. those stories and more on "nightly business report." for thursday january 5th. >> good evening everyone and welcome. nasdaq closed at an all time high today but otherwise it was a down day for stocks. one reason retail wreckage. holiday gloom has set in over that sector and shares of the some of the recognizable brands in retailing got slammed hard today in trading. macy's the world's largest fell nearly 14%, kohl's tumbled 1% making these two stocks the worst performers of all the 500 in the s&p 500 today. the selling in the sector follows a number of dismal reports from those retailers which we told you about beginning yesterday. sales slumped at the end of last year, physical stores struggled to keep pace with online retailers and it's all the size mick shift happening in an industry that touches us all. kourtney reagan has the story in a macy's in new york. >> early strength for closing sales gave holiday hope to retailers like macy's and kohl's. a strong black friday weekend and days before christmas weren't enough. holiday sales 2% and plunged double digities to a struggling sears. macy's is closing 6 stores this year a total of 100 by the end of next year. sears says it's closing 150 more stores and selling its craftsman tool brand as the business shrink. if this is the beginning of the end for the group. >> the bigger dynamic is the share shift happening at a more microlevel. those dollars are still being spent. they're still buying apparel. they're just buying it online and on amazon. and when these dollars are being shifted this legacy retailers are losing. >> reporter: they're just not spending as much as at department stores. more and more consumers are spending online. around 85% of all purchases are still made in stores. online retail sales during the holiday season grew more than initially forecast. a scan of more than 4 million e-mail receipts amazon captured nearly 40% of all online purchases during the holidays. apple.com sales grew 66% over last year. consumers did buy on macy's.com with online sales growing double digits. still not enough to tip the total sales balance into positive territory. master card spending continues to show sales growth for spending on experiences, for vacation and entertainment and that eats away at the spending available for things like hand bags. for "nightly business report" i'm courtney reagan in new york. >> it wasn't all bad news on the retail front. the gap reported a rise in its holiday sales. the owner of gap, old navy and banana republic stores sited improved momentum. and that prompted the shares to take off in after hours trading today. >> to put retail struggles into context we're joined tonight by jan niffin. nice to have you back, thanks for join us. >> it's great to be here. >> we got a number of your predictions for this new year 1:. let's start with number one, going to be more store closures in 2017 than we've ever seen before. >> when i made that one it seemed like i was stepping out there. now that we've seen these releases it may feel more reasonable. we're certainly going to see the closings from macy's. we don't know how many sears was going to close. we know there's a big store closing program there. but we're also seeing inline stores close and we will continue to see closures i think for the next several years. i've been saying for more than a year now we're going to see 400 malls that we don't need of the 1,100 we have out there go away. and i've been saying for a long time that i thought macy's would be in the vicinity of 550 stores when they were done. that means they'll have even more closures than they've announced so far. it's not just macy's it's all across the industry. we've seen store closures from specialty stores and from department stores for a long time and it's just going to continue. >> i don't know whether you think we're seeing beginning to see the death of the mall but what we did see and you reported on is a fall off dramatic in foot traffic in malls which you think is going to continue and the number of stores people visit once they're in the mall is half what it was just five or six years ago. >> i predicted that we would see the largest drop in mall traffic in the history of the mall in the fourth quarter of this year. it looks like that i was right. i think it will be worse in the fourth quarter of next year. i think this is accelerating not slowing down. that means that we don't need 1,100 malls in america and i've been saying for more than two years that we were going to see at least 400 do something else. they might not go away but they're not going to be the mall as we know them today. that doesn't mean it's the death of the mall. we have 250 fabulous malls in america that are going to get more business, have higher rents, going to do great but that's 250 out of 1,100. >> that's right. you also predicted sears will file for bankruptcy in august and basically we've seen them put out the fact that they are going to close a number of stores, maybe it's the drip, drip, drip before the actual event. >> they got a new lease on life after i wrote that. they got a loan of what almost $500 million and they just sold craftsman for what they described as a $900 million transaction. so once you do some asset sales you can go longer. i have described that though as basically they're selling the assets, they're taking the cash, they're putting it in the fireplace and sending it up the chimney because they keep losing so much money every quarter. >> you've got some interesting thoughts about some of the tweener stores like sax and lord and taylor but maybe your most interesting prediction there could be a bitter for macy's which is by your accounts sort of going through some trouble. >> what would it be? >> i think macy's will be the survivor in the space. macy's will be there. they'll be there with 500 stores or more. i still believe that we need the merger of the off-price space and the full price space. i said for ten years that macy's should buy an off-price player instead they started their own because they were too late in the game. now given the size of the off-price players they could buy macy's why would they want to do that? because in order to have a viable off-price space you need a full price space to compare yourself to. so if the off-price guys own the full price guys they would have the market sewed up for the best brands in the country. i think that's a transaction that should happen. >> good to see you as always. the world's largest retailer is pushing further into ecommerce, walmart will buy shoe bye for $70 million. walmart medal online expansion its priority last year when it purchased jet.com for more than $3 billion and at that time it also says it plans to invest billions more in its online operation while cutting back on new store openings. >> meantime online retailer amazon is reportedly in talks to buy -- american apparel is known for its made in the usa slogan and says it's the largest clothing manufacturer in north america. so with that acquisition, amazon could in theory save thousands of u.s. manufacturing jobs. >> as we mentioned earlier, retail stocks weighed on the broad market today so did financials which have been among the markets best gainers since the election. solid economic data today not enough to lift shares. the dow jones industrial average fell 42 points to 19,899. that's it first loss of the new year. so it's just day three but either way. nasdaq up 10 to a record close and the s&p 500 very slightly lower. >> one day ahead of the monthly employment release a new report shows a slowing in private sector job creation. private payroll processor adp says 153,000 jobs were created last month. that was below market expectations and down from november. all of the gains came from the service sector. separately the number of americans filing for unemployment benefits fell by 28,000 last week to one of the lowest levels in four decades. >> the services sector the biggest part of the u.s. economy expanded as a solid pace at the end of last year. new orders rose sharp little and even the troubled mining sector saw growth. it counts for more than two-thirds of economic output. >> fiscal stimulus may not kick start growth as aggressively as many think. that's according to the president of the san francisco fed who today said he's expecting economic activity to be subdued. >> my view in terms of the demographic that we've been seeing is that growth is likely to be one in half to one and three quarters percent. some policies can change that. in technology, more broadly in infrastructure, i think we can shift that upwards. right now my view is of the fiscal stimulus that people have been talking about would have a relatively modest effect. >> president-elect trump has proposed a big increase in infrastructure spending that he says will stimulate the economy. >> and donald trump set his sites on toyota today and its manufacturing south of the border. toyota motor will build a new plant in mexico to build corolla cars for u.s. no way! build plant in u.s. or pay big border tax. toyota responded by saying the mexican plant will not cut u.s. jobs but shares fell hard mid dai when that tweet went out. >> time warner shares also came under pressure mid-day when it was reported that the president-elect still opposes its merger with at&t. the report sited unnamed people close to donald trump. but the stock reacted as you can see by that sharp drop right before 2:00 p.m. eastern time. the move in at&t not as dramatic. >> the nation's top u.s. intelligence official said he is res lieutenant in his belief that russia staged a cyber attack during the presidential election. the comments conflict with the president-elect's views come during a senate hearing. >> some of the nation's top spy chiefs went to capitol hill today for a showdown over russian hacking in the 2016 election and it was a chance for the intelligence best to ver publicly disagree with the incoming commander in chief. earlier this week, trump questioned the validity of the russian hacking accusations. thursday the director of national intelligence james clapper and admiral mike rodgers disagreed with president-elect trump. >> director clapper, how would you describe your confidence in attributing these attacks to the russian government as opposed to someone in their basement? >> it's very high. >> they dismissed wikileaks founder who trump quoted favorably this week. >> i don't think have a whole lot of respect for him. >> and they clearly didn't appreciate the mocking tone of some of trump's recent tweets about the intelligence community. >> i think there's a difference between skep ta six and disparagement. >> trump's tone about the services seemed to pivot. he tweeted, the media lies to make it look like i am against intelligence when, in fact, i am a big fan. >> trump is scheduled to get take classified briefing at trump tower tomorrow from rodgers, clapper and other u.s. intelligence officials who will explain their assessment and also how it is that they know what they know. i asked admiral rodgers as he was leaving the hearing what his message for donald trump is and he said, no comment. i'll talk to him tomorrow. for "nightly business report" i'm in washington. >> still ahead after rocketing higher are apartment rents starting to fall back to earth. investment analysts as a group project a 12% rise in earnings for the s&p 500. while that may seem like a big game, forecasts are down from october 1 when growth was expected to hit nearly 14%. financials and technology could see their earnings grow at a double digit pace. >> looser regulations and lower taxes are some of the things that have driven the market higher since the election. in fact, the rush of optimism has been so strong that even some bears have turned into bulls. as mike santoli reports that group think may not necessarily be a good thing. >> the so-called trump rally has investors looking on the bright side again. a recent pick-up in economic growth and hope for business friendly trump policies have lifted the dow jones more than 8% since election day and boosted several measures of investor confidence to levels not even in years. that's the good news. in the short-term signs of overoptimism are flashing a caution signal for stocks. immediate further upside could be limited with the bullish bandwagon looking pretty full. surveys of both professional and individual investors have shown an extreme surplus of bulls expecting higher share pluses over shrinking group. at a conference board measures hit at 15 year high at last report while positive for household spending such high confidence readings are associated more with rallies nearing a high than one that sets the speed even higher. by wall street's often contrary logic, extreme optimism typically means stocks are set to stall or tip in the coming weeks. this setup is complicated by the sectors such as bank stocks have surged since the election on those hopes of quick tax cuts, deregulation and new infrastructure spending under a president trump. as the inauguration nears the rally has been impress civil broad and corporate earnings are paused to recover from their 2016 tail spin in the coming quarters. still, the best thing for stock prices in the longer term might be for a brief market set back that dimz investors' enthusiasm for stocks. a less crowded bandwagon has a better chance of moving ahead quickly. for "nightly business report," i'm mike santoli at the new york stock exchange. >> at the investors look for places to put their money some are eyeing a sector that had fallen out of favor. telecome. there's a reason why there's a new found interest in that group. >> the stock market rally since the trump election victory has produced a huge amount of gains specifically for the s&p 500 financial sector the best performing sector in the s&p 500 since that time. but these days the second best performing sector overall is a dividend paying sector and that is the telecome sector. they're up 15% since the election coming close to the 16% gain for the s&p 500 financials or the bank stocks. not all interest rates sensitive sectors like utilities are consumer staple stocks have participated in the upside. they've been lagging the overall market but telecome stocks are important for a lot of investors because they pay out side dividends compared to other parts of the stock market. this is the bang guard telecome ticker vox. it hit a record high in trading this past week and a lot of people are wondering whether this can continue as investors look for more dividend paying stocks. two of the biggest components of the index overall have contributed some of the biggest gains. at&t is up 11% but till pays refers a 4.6% dividend yield and verizon shares up by about 9% and they still pay a dividend yield over 4%. as people start to look in places to invest this has a lot of positive momentum and telecomes could be someplace that investors will look going forward if they're still looking for those dividend payments. for "nightly business report" i'm dominic chu. >> l brands suffers the same ills as macy's the owners of bath and body works lowered it's profit outlook after reporting a decline in same store sales during that period. the company sited weak demand for lingerie products. constellation brands reported higher products and raised it's full year earnings forecast. the owner of cor rona were driven bill strong demand for beers. the shares fell as investors remain unshurd how the new president will impact that company. shares fell 7% to 145. >> the owner of michelle watches said the new products will include smart watches and fitness trackers. they fell more than 7% today to 25.01. the research company gart ner has agreed to take over the ceb for more than $2.5 billion. it offered consumers a greater array of services. shares of ceb soared almost 21% to 74.85. >> mortgage rates fell for the first time since the election according to freddie mac the 30 year fixed rate average declined to 4.2%. it's the first time since 2014 mortgage rates opened the year above 4%. >> apartment rents are starting to fall. there's new evidence that the trend may be starting to reverse. diana olick. >> if you're looking to upgrade to a nicer rental apartment now is the time. higher end rents are finally coming down. a new supply gets ready to hit the market this year. rents had been -- high demand out paced supply. there is a limit even on the luxury end. apartment vacancies are still very tight and getting tighter but rents are evening. rent growths at the 2016 was the lowest in seven years and some major metropolitan markets are seeing rent fall. boston, new york city, d.c., austin, seattle and san francisco all saw small rent drops according to a new report from reese, inc. landlords are making bigger concessions now before much more supply hits the market this year and pushes rents even lower. the drops aren't everywhere, though. they're mostly in expensive markets in expensive buildings. cities like nashville, salt lake and sacramento are still seeing rents push higher. i'm diana olick in washington. >> coming up doubling down. what some companies are doing to take entertainment into the next dimension. here's a look at what to watch tomorrow. the employment report for december is due out. expectations are for the creation of about 185,000 new jobs. boeing releases its final delivery and order numbers for 2016 and a number of federal reserve officials is scheduled to speak on the economy. and that's what to watch friday. >> verizon says it's unsure now whether it will proceed with its acquisition of yahoo's core assets. the carrier is still stud yig the data breech that effected more than 1 million accounts. she cannot say with confidence one way or the other whether the deal will proceed. >> those verizon comments were made at the consumer electronic show, the world's largest technology exhibit. that wasn't the only thing that happened at the big conferences. julia boorstin reports from las vegas, the focus was on a few dom it instant high tech trends. >> new super thin tvs are on display, some of the biggest news is about the content consumers can access on these giant screens or anywhere else as technology revolutionized the entertainment experience. today hulu announcing it's new streaming tv bundle live an on demand content plus dvr capability for under $40. >> when people take the hulu package they're in the paid tv systems with services like ours you're going to see paid tv stabilize in this country and grow in the future. >> hulu joining direct toifl and sling with alternatives to the traditional live tv bundle and media companies are increasingly on board. >> there was a lot of concern and what we really i think were able to convince them of, look, cord cutting is happening. it's happening without sling being in the market so you can either ignore it or you can try to embrace it and figure out packages that will appeal to people who cut the cord. so i think there's now a growing acceptance really they need to segment the market. >> it's not just video content a range of companies here are focused on using technology to bring takenment into a new dimension with new virtual reality hardware and software. >> 20th century fox is here due out this fall. the fox doubling down on creating vr experiences to sell and it expects other studios to follow. >> i think you have enough players out there that there's a market developing, so it's not a risky investment to develop commercial ar or vr so you're going to have more players develop long form commercial content. >> hdtv vibe just pushed for new content. making it easier for consumers to find and engage with vr content and making it more appealing to invest in these head sets. if the trend showcase here play out, 2017 could be the year that content breaks out from the bundle and becomes more emer sieve and engaging than ever. for "nightly business report" i'm julia boorstin in las vegas. >> that's a good look on her, right? don't you think? >> with the goggles on and it messes up your hair. >> oh, yeah. that's it for us tonight on "nightly business report." i'm sue herera thanks for joining us. >> and i'm tyler mathisen. have a great evening everybody and we will see you back here tomorrow with your virtual reality goggles on. >> announcer: "nightly business report" has been funded in part by hss. >> our value principals are patient first and we want to deliver the highest quality care. >> the goal of creating and sustaining value is all about 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