Moody’s Investors Service late Thursday downgraded Macy’s Inc.’s M, -10.14% debt and Gap Inc.’s GPS, -5.90% debt to junk on the disruption and impact on demand wrought by the novel coronavirus and the retailers’ ailing balance sheets. Macy’s will need to “refocus its efforts toward prioritizing the preservation of liquidity and delaying its strategic plans to improve its operating performance,” Moody’s said. Weaknesses in Macy’s credit profile “have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions and Macy’s remains vulnerable to the outbreak continuing to spread,” the debt ratings agency said. Macy’s debt was downgraded one notch to Ba1, the first rung of speculative, from Baa3. Gap’s debt was downgraded two notches to Ba1 from Baa2, reflecting “the steady decline in Gap’s cash flow from operations and credit metrics as well as the anticipated disruption of the COVID-19 virus in the face of unprecedented temporary store and mall closures,” Moody’s said. Despite the company’s $1.7 billion in cash and short-term investments plus the ability to reduce its dividend, Moody’s expects that Gap’s earnings “will materially contract in 2020 and Gap is currently pursuing a secured credit facility,” the debt ratings agency said. Gap earlier Thursday said it was halting its dividend and withdrawing 2020 guidance for the year. Macy’s stock rose 1.6% in the extended session after ending the regular trading day down 10%; Gap shares rose nearly 1% in the late session after closing down 6%.