* Nonfarm payrolls report due on Friday
* S&P bank index set for worst day since September
* Department store stocks fall on Macy's, Kohl's forecast
* Dow down 0.41 pct, S&P down 0.24 pct, Nasdaq up 0.02 pct
(Updates to early afternoon)
By Yashaswini Swamynathan
Jan 5 The Dow Jones Industrial Average and the
S&P 500 were poised for their first down day this year as
investors sold bank stocks, which had been the driving force
behind the Trump rally over the past two months.
The S&P 500 financial index was down 1.6 percent in
early afternoon trading - set for its worst day since September
- due to declines in JPMorgan, Wells Fargo and
Bank of America.
The index has risen 17.2 percent since Donald Trump's
victory in the November election as investors bet on his
proposals aimed at simplifying banking regulations.
Goldman Sachs, which was the biggest driver for the
Dow in the rally, was off 2.2 percent.
"We are at the top of the range from the perspective of the
Dow and the S&P, so that means we have a little bit of downside
room to move, but frankly I think it will be fairly minimal,"
said Randy Frederick, vice president of trading and derivatives
at Charles Schwab & Co.
"I suspect financials are just starting to catch up to the
fact that rates have topped out in the near-term."
Adding to the downbeat sentiment was the ADP National
Employment report which showed fewer-than-expected jobs were
added in the private sector in December.
The report sets a precedent to Friday's more comprehensive
nonfarm payrolls report that includes both private and public
At 13:03 p.m. ET, the Dow Jones Industrial Average
was down 82.57 points, or 0.41 percent, at 19,859.59, the S&P
500 was down 5.84 points, or 0.257184 percent, at
2,264.91 and the Nasdaq Composite index was up 0.62
points, or 0.01 percent, at 5,477.62.
Seven of the 11 major S&P 500 sectors were lower, with
financials and industrials weighing the most
on the broader index.
Department stores Macy's dropped 14 percent while
Kohl's fell 20 percent after the companies cut their
The warnings swept up other department store stocks in their
wake - Nordstrom fell 9 percent and J.C. Penney
was down 7 percent.
Online retailer Amazon.com, which has been eating
into the sales of brick-and-mortar retailers, was up 2.3 percent
at $774.50. The stock provided the biggest boost to the Nasdaq.
Declining issues outnumbered advancers on the NYSE by 1,916
to 975. On the Nasdaq, 1,810 issues fell and 991 advanced.
Declining issues outnumbered advancers on the NYSE by 1,860
to 1,052. On the Nasdaq, 1,770 issues fell and 1,053 advanced.
The S&P 500 index showed 16 new 52-week highs and no new
lows, while the Nasdaq recorded 71 new highs and 12 new lows.
(Reporting by Yashaswini Swamynathan in Bengaluru; Editing by