This just in from Fortune’s Suzanne Kapner:

Macy’s (M) delivered an inauspicious holiday gift to 900 employees this afternoon, when the huge department store retailer disclosed plans to close nine stores.
 
Like other department store retailers, Macy’s has suffered from lackluster sales this holiday season. To try to spur last minute holiday shopping, the company took the unusual step of keeping eight stores in the metro New York area open round the clock in the days leading up to Christmas.
 
But, in fact, Macy’s troubles date back further, to the 2005 acquisition of the May Department Stores. In the wake of that deal Macy’s, formerly known as Federated Department Stores, closed dozens of overlapping stores.
 
Given the company’s middling performance this year, analysts had suspected that further store closings were in the works. In an interview earlier this month, Macy’s Chief Executive Terry Lundgren told Fortune: “We always go through the normal process of pruning our real estate portfolio, but there are no plans for a wide-scale closure of stores.”
 
Despite Macy’s troubles, the company continues to open stores in areas it considers more promising. Macy’s opened 10 new department stores in 2007 and one furniture gallery. Some five stores are expected to open in 2008 and six to eight new locations are on the table for 2009.
 
The stores slated for closure, in Ohio, Texas, Louisiana, Indiana and Utah, are located in regions that have been some of the weakest for Macy’s. The company said it would try to relocate displaced employees to nearby stores when possible - cold comfort for the remaining Macy’s workers who will start the New Year jobless.
 

Michelle Leder makes a good point at footnoted.org about the disclosure disconnect at mortgage lender Novastar (NFI). The company issued a press release last week announcing that CEO Scott Hartman and finance chief Gregory Metz “will leave the company.” But two days later, in its SEC filing on the subject, Novastar said the two had been “terminated.”

The shift prompts Leder to wonder, “Why would NovaStar not just state the facts the first time around? I mean it’s not as if anyone would be surprised that a company might want to fire the folks who were running the show when the stock dropped through the floor.”

And indeed, disclosure shortfalls are far from the biggest problem at Novastar. The company’s business has collapsed along with the implosion of the subprime mortgage market. Novastar recently posted a third-quarter loss of $64.05 a share, which helps to explain why it has seen its shares drop to $3 and change recently from a reverse split-adjusted $107 apiece at this time last year.

As for the difference between leaving and being terminated, no one answered the phone Friday at Novastar. But note the last line of boilerplate in recent Novastar press releases: “This press release speaks only as of its date and we expressly disclaim any duty to update the information herein.” It seems like that’s not the only duty Novastar’s flacks are disclaiming.

Netflix (NFLX) has had a nice run, but it won’t last. This week the mail order DVD company got some bad news when the Financial Times reported that Apple (AAPL) is joining up with News Corp.’s (NWS) Fox to rent out digital movie downloads through the iTunes service. Given how Apple changed the digital music racket, it’s only natural to expect the company to make big inroads into the home movie business as well - most likely at the expense of Netflix and its struggling rival Blockbuster (BBI).

That’s very much Rick Aristotle Munarriz’ take at the Motley Fool. Munarriz, who owns Netflix stock, points out that Amazon (AMZN) has been doing digital downloads since last year. So even with Wal-Mart (WMT) dropping out of the digital download business, Netflix and Blockbuster face the prospect of rising competition and falling prices. That’s bad news for shareholders in Netflix, whose shares have jumped 59 percent off their September lows after the company survived an earlier price war.

The verdict isn’t unanimous. At TheStreet.com, Kevin Kelleher conjectures that Netflix seems to be having a good holiday season. But as Munarriz argued back in July, Netflix may have missed its best chance to counter the likes of Apple and Amazon when it failed to move forward on a digital movie-delivery partnership with Tivo (TIVO). “In short, tomorrow is coming anyway,” he wrote this week of the Apple-Fox linkup, “but now it may be coming a little sooner than expected.” That’s too soon for comfort for Netflix fans.

Former UnitedHealth (UNH) CEO William McGuire can’t catch a break. A federal judge overseeing a shareholder lawsuit against UnitedHealth has frozen $874 million worth of McGuire’s stock options as he seeks to review the terms of a settlement earlier this month. That agreement called for McGuire to hand over $420 million in stock and benefits to settle claims tied to his role in a so-called stock option backdating case. This week’s move by U.S. District Judge James Rosenbaum comes as McGuire and UnitedHealth face another legal challenge, this time from the California Public Employees Retirement System. Calpers is suing UnitedHealth over allegations that McGuire orchestrated a scheme that enriched him and other top UnitedHealth execs by changing the dates on their stock option grants. Rosenbaum wrote that he froze McGuire’s remaining stock option holdings because Calpers has “clearly shown a significant probability of success on the merits” in its suit, the Minneapolis Star-Tribune reported. Sounds like McGuire’s giveback act may not be done.

A new municipal bond insurer means bad news for MBIA (MBI), Ambac (ABK) and the other struggling financial guarantors. Buffett’s Berkshire Hathaway (BRKA) is opening Berkshire Hathaway Assuarance Corp. in New York, the state with the most muni bond issuance, and plans to seek permission to open in other states, The Wall Street Journal reports. The move could hurt MBIA, Ambac and their peers by introducing a strong competitor just as the firms are struggling to raise billions of dollars in new capital to stave off possible ratings downgrades. Buffett’s decision also seems to reduce the chances that he’ll step in to recapitalize one of the other bond insurance firms. MBIA recently brought in private equity firm Warburg Pincus for a capital infusion, and Ambac is considering capital-raising alternatives, though it swears it won’t have to cut its dividend.

One thing is certain: Berkshire Hathaway Assurance won’t expose itself to massive risks by moving beyond the plain vanilla business of insuring government bonds to take on lucrative - but risky - issues tied to the mortgage industry. That’s what MBIA and Ambac did, to their shareholders’ enormous profit a few years back and to their great discomfort now. As Buffett tells the Journal, “We won’t stray.”

The holidays can be so bittersweet. Thursday brought the apparent demise of the U.S. Basketball League, the minor league circuit that bills itself as the first publicly traded sports league. The league, whose shares recently traded at 51 cents apiece on the thinly traded over-the-counter bulletin board, once featured the likes of Manute Bol and Spud Webb - odd players, to be sure, but ones who were at least briefly NBA notables. But the USBL’s fortunes have faded in recent years, to the point where a recent press release celebrated the Toronto Raptors’ signing of one Jamario Moon. This week, the USBL suspended its 2008 season and hired New York’s Colebrook Capital to scout out new investors. But of course, it’s all good, the money-losing league assures us. “This process,” commissioner Daniel Meisenheimer said of the effort to raise more cash and place new franchises, “should reward shareholders and strengthen the USBL financially.” Sounds like hard times on the hardwood.

Pakistan’s leading opposition politician, former prime minister Benazir Bhutto, was killed Thursday in an attack on an election rally in Rawalpindi. Police said a suicide attacker fired shots at her before blowing himself up. At least 14 others were killed and 60 injured, according to reports. Bhutto, who had escaped an assassination attempt when she returned to Pakistan in October after years of exile, was 54.

Bhutto’s assassination added to an uneasy day in financial markets. Stock prices fell and the price of crude oil rose, as investors worried that political instability could lead to possible supply disruptions overseas. Meanwhile, oil inventories continued to decline in the U.S. heading into the teeth of the winter home heating season. Crude prices are up 60 percent this year and are within a few dollars of last month’s all-time high of $99 and change.

But while consumers surely don’t like paying $3 a gallon at the pump, some observers say energy costs remain manageable even at these levels. That notion has economist Gregory Clark of the University of California at Davis wondering how high prices could go - without triggering catastrophic economic damage - as worldwide oil production slows in coming years.

“The economy would withstand enormous increases in energy costs with modest damage because energy is even now so extravagantly cheap that most of it is squandered in uses of little value,” Clark writes in a recent op-ed piece in the Sacramento Bee. “Recently, I drove my 13-year-old son 230 miles round-trip from Davis to Chico, to play a 70-minute soccer game. Had every gallon of gas cost four hours of my wage, I am sure his team could have found opposition closer to home.”

He says Americans could maintain a high standard of living even if oil spikes to $500 a barrel - as long as we’re willing to make changes. That, of course, remains to be seen.

The holidays aren’t being kind to retailers. First, consumers spent even less than projected on Christmas gifts in a trend that hammered sales at chains such as Target (TGT). Now there are signs that Wal-Mart (WMT) - which had been looking like a rare winner in this year’s holiday sales slowdown - may have to play catch up on the expected surge in post-Christmas gift-card spending. The Associated Press reported Wednesday that a computer glitch was keeping Wal-Mart from processing gift cards. An internal investigation found that a “third-party verifier’s systems had an inadvertent processing error,” AP reports. Wal-Mart says it’s working to resolve the problem, but that’s all too familiar a claim at the image-challenged company. Whatever Wal-Mart says, customers who can’t cash in their gift cards aren’t going to be in a festive mood.

Citi (C) shares may come under pressure again amid new questions about the bank’s dividend. Analysts at Goldman Sachs wrote Thursday that Citi will have to cut its 54-cent quarterly dividend by 40%, Bloomberg reports. In making the call Goldman joins CIBC World Markets analyst Meredith Whitney, who has been saying for two months that Citi will need to eliminate its dividend to conserve cash, and Deutsche Bank analyst Mike Mayo, who has said last month’s capital infusion from an Abu Dhabi investment fund wouldn’t be enough to offset rising losses on bad credit bets. Citi has said it doesn’t plan to cut the dividend, though paying out at the current rate costs the capital-strapped bank $11 billion annually.

Goldman also expects Citi to take another huge charge on its holdings of risky debt securities known as collateralized debt obligations. Citi has already projected that it would take as much as $11 billion in CDO writedowns, but Goldman says it now expects the damage to hit $18.7 billion. The forecast comes as Citi shares have lost nearly half their value this year amid worries about the bank’s exposure to risky debt issued during the recent boom. Whatever happens, expect new chief Vikram Pandit to have plenty of bad news to share when Citi reports fourth-quarter numbers on Jan. 15.

The biggest merger story on this relatively slow day is Berkshire Hathaway’s (BRK.A) purchase of 60% of Marmon (with more to come) for $4.5 billion. Fortune’s Carol Loomis, who knows a thing or two about Berkshire, notes that the press has been a little sketchy describing what Marmon does. She writes:

First of all, it is definitely a conglomerate. That would make it undesirable merchandise for many companies, who do not wish to be tarred with the conglomerate brush. Berkshire, on the other hand, is already a conglomerate and perfectly willing to be considered a “conglomerate squared,” which is language Buffett used this morning on his CNBC interview. That was an ironic reference to “CDO squared,” which is a term being used to describe the worst kind of CDO holding.

Some reports referred to Marmon’s four divisions.  Yes, but that is incomplete. Marmon has nine business sectors. See the press release.

Here are the nine sectors, as described to me by Buffett:

1. Wire and cable

2. Transportation services and engineered products. Includes Union Tank Car.

3. Highway technologies. Specialized trucks, for example

4. Distribution services. Who would guess that includes pipe and tubing?

5. Flow products. Elegant name for plumbing and airconditioning products.

6. Industrial products. Fasteners, for example.

7. Construction services. Interesting business. Leases cranes for, say, work on the Alberta tar sands. I think this sector has 700 cranes, but I don’t know how many of those are in Alberta.

8. Water treatment. Softeners, for example.

9. Retail services. Strange name for shelving equipment for retail stores. Baskets for retail stores.