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Why Nordstrom, South Jersey Industries, and Sears Holdings Slumped Today

Dan Caplinger, The Motley Fool

Monday was a good day for the stock market, with the Dow setting yet another all-time high. Early results from earnings season have been positive, and even though key domestic economic agenda items like healthcare and tax reform remain somewhat uncertain, investors appear confident that something will be accomplished in the near future. Even though the overall mood in the market was favorable, some bad news from several stocks helped keep enthusiasm in check. Nordstrom (NYSE: JWN), South Jersey Industries (NYSE: SJI), and Sears Holdings (NASDAQ: SHLD) were among the worst performers on the day. Below, we'll look more closely at these stocks to tell you why they did so poorly.

Nordstrom takes a step back from family takeover

Shares of Nordstrom fell 5% after the high-end retailer said that members of the Nordstrom family have suspended their active exploration of making an offer to take the company private. A news release said that the decision should foreclose further discussion until the end of the year, but that the Nordstrom family could make a proposal after the holiday season ends. The pre-holiday season is always a busy one in the retail industry, and it has proven more difficult than many had hoped for the family to get the outside financing necessary to get a deal done. Some think that the news will permanently end progress toward a deal, while others genuinely believe that 2018 will bring a concrete proposal.

Architectural rendering of new Nordstrom store with a dozen shoppers walking outside.

South Jersey makes a big buy

South Jersey Industries stock dropped 9% in the wake of the company announcing the acquisition of two small gas utility businesses. The New Jersey-based utility said that it would acquire Elizabethtown Gas and Elkton Gas from a subsidiary of Southern Company (NYSE: SO), paying a total of $1.7 billion. CEO Michael Renna was happy about the news, saying that the two purchases are "a great fit for SJI and reinforce our commitment to high quality regulated earnings growth." Yet with the deal not being accretive to earnings until 2020, some shareholders think that Southern might have gotten the better end of the deal compared to South Jersey, especially in an increasingly tough environment for utility stocks.

Sears Holdings suffers a board departure

Finally, shares of Sears Holdings plunged 11.5%. The ailing retailer lost a member of its board of directors, as Bruce Berkowitz decided to leave the board effective at the end of October. A hedge fund affiliated with Berkowitz's Fairholme Capital Management unwound itself, distributing shares of Sears Holdings and other assets to its investors. The move comes as a stark reversal in the hedge fund manager's philosophy, which until now had included substantial purchases of Sears stock. The decision only heightens fears among investors that Sears could be headed for a liquidation of its own, especially if the holiday season doesn't go well.

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Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool recommends Nordstrom. The Motley Fool has a disclosure policy.