Wall St. dips as Amazon-Whole Foods deal roils retail
Reuters
Published Jun 16, 2017 02:54PM ET
Wall St. dips as Amazon-Whole Foods deal roils retail
By Lewis Krauskopf
NEW YORK (Reuters) - U.S. stocks mostly edged lower on Friday as Amazon (NASDAQ:AMZN).com's $13.7 billion deal to buy upscale grocer Whole Foods roiled the retail sector and wounded shares of an array of companies including Wal-Mart and Target .
The deal by Amazon, a proven retail disruptor, marked a major step by the internet retailer into the brick-and-mortar retail sector.
Wal-Mart (N:WMT) shares sank 5 percent, weighing the most on the S&P 500 and the Dow. Shares of Target (N:TGT), CVS Health (N:CVS) and Costco (O:COST) fell between 4 percent and 7 percent.
"It's disrupting a number of industries here, and that's what's causing the market problems," said Bruce Bittles, chief investment strategist at Robert W. Baird & Co in Sarasota, Florida.
Amazon shares gained 3.6 percent, making the stock the biggest boost to the S&P 500. Whole Foods (O:WFM) shares surged 30 percent.
The S&P consumer staples sector (SPLRCS) fell 1.3 percent, by far the worst performing major sector. The S&P 500 food and staples retailing index <.SPLRCFD> dropped 4.7 percent.
Grocery chain Kroger (N:KR) was the biggest loser on the S&P 500, down 11.3 percent, while Supervalu (N:SVU) dropped 12.8 percent.
"I would not like to be somebody playing in the grocery space right now," said Jan Rogers Kniffen, chief executive of retail consultancy firm J. Rogers Kniffen WWE in New York.
The Dow Jones Industrial Average (DJI) rose 6.71 points, or 0.03 percent, to 21,366.61, the S&P 500 (SPX) lost 1.65 points, or 0.07 percent, to 2,430.81 and the Nasdaq Composite (IXIC) dropped 9.45 points, or 0.15 percent, to 6,156.06.
The technology sector (SPLRCT) fell 0.2 percent, continuing its recent slump. Tech has led the S&P 500's 8.5 percent rally this year, but is on track for its second week of declines, prompting questions over whether investors are moving money into other sectors.
"I think we need to see more of a pullback to say there is a serious rotation going on as opposed to just some profits coming off the top," said Chuck Carlson, chief executive officer at Horizon Investment Services in Hammond, Indiana.
Energy shares (SPNY) rose 1.1 percent, propping up the S&P 500. Oil prices (CLc1) (LCOc1) edged up from 2017 lows as some producers cut back on exports.
U.S. homebuilding fell for a third straight month in May to the lowest in eight months as construction activity declined broadly. Investors were continuing to digest the Federal Reserve's interest rate hike on Wednesday, with some concerned about the economy's ability to absorb higher rates.
Get The News You Want
Advancing issues outnumbered declining ones on the NYSE by a 1.00-to-1 ratio; on Nasdaq, a 1.44-to-1 ratio favored decliners.
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.