By Sue Chang and Barbara Kollmeyer, MarketWatch
Amazon makes a $13.7 billion bid for Whole Foods
U.S. stocks were pressured on Friday as retailers slumped
following Amazon's $13.7 billion blockbuster merger with Whole
Foods Market.
Shares of Amazon.com Inc. (AMZN) rose 2.9% after the
announcement, while shares of Whole Foods Market Inc. (WFM) were
soaring 29%., but the broader consumer-staples sector was
sinking.
The S&P 500 fell 3 points, or 0.1%, to 2,429, with consumer
staples down 1.2%
(http://www.marketwatch.com/story/consumer-staples-stocks-on-track-for-worst-daily-drop-in-6-months-as-amazon-eyes-whole-foods-merger-2017-06-16),
the worst performer among the index's 11 sectors.
The Dow Jones Industrial Average traded at break-even levels at
21,357. The weakest performer among the main equity benchmarks, the
Nasdaq Composite Index dipped 16 points, or 0.3%, at 6,148.
For the week, the Nasdaq Composite is set to book a loss of
about 1%. The S&P 500 is down 0.2% for the week and the Dow is
on track to log a 0.4% gain.
Softer-than-expected data on U.S. housing starts didn't help the
tone. Housing starts fell 5.5%
(http://www.marketwatch.com/story/home-builders-cut-back-for-third-straight-month-2017-06-16)
to an annual rate of 1.09 million in May, the lowest level in eight
months. Economists polled by MarketWatch had forecast starts at a
1.23 million pace.
And the University of Michigan consumer-sentiment index fell to
94.5 in early June reading, the weakest since November.
"Aside from the weekly jobless claims, the majority of the
economic data released this week--inflation, retail, housing--was
below expectations," said Randy Frederick, managing director of
trading and derivatives at Schwab Center for Financial
Research.
"In short, much weaker than expected, although the data can be
quite volatile and averages for 2017 to date are still up a little
from last year's averages...That said, we will need to see a
rebound in starts and permits in a month's time to remain confident
that the weakness today is not much more than volatility," said Jim
O'Sullivan, chief U.S. economist at High Frequency Economics, in a
note.
Looking ahead, Wall Street could see increased volatility later
in the session as it is a quadruple-witching day, which means the
simultaneous expiration of stock-index futures and options, as well
as stock options and single-stock futures.
Read:Will quadruple witching spook the market this time?
(http://www.marketwatch.com/story/will-quadruple-witching-spook-the-market-this-time-2017-06-16)
Opinion:Equity-allocation indicator flashes bear-market warning
(http://www.marketwatch.com/story/equity-allocation-indicator-flashes-bear-market-warning-2017-06-16)
Still, the fact that the S&P 500 remains above its main
moving averages and that they point to further upside is
encouraging, according to Frank Cappelleri, a technical strategist
at Instinet LLC.
The key number to watch, he said, is 2,400 which was a previous
resistance level that took six weeks to break through. If buying
emerges as the large-cap index nears that level, 2,400 will become
a crucial support area.
The Federal Reserve: Minneapolis Fed President Neel Kashkari
said in an essay published on Friday that he voted against an
interest-rate hike at the monetary policy meeting this week because
he wasn't convinced the recent spate of soft inflation readings
wasn't a continuing trend
(http://www.marketwatch.com/story/feds-kashkari-says-he-didnt-agree-with-yellen-that-soft-inflation-is-due-to-one-off-factors-2017-06-16).
Need to know:Trust in tech stocks and dozens of other growth
names--here's why
(http://www.marketwatch.com/story/trust-in-tech-stocks-and-dozens-of-other-growth-names-heres-why-2017-06-16)
"Investors had already been digesting the fact that, despite
recent weak U.S. data, the U.S. Federal Reserve appeared
unconcerned about a slowdown in the U.S. economy," said Michael
Hewson, chief market analyst at CMC Markets UK, in a note.
"These two factors combined, along with further weakness in the
U.S. tech sector, played into the risk averse mood among equity
investors as they began to mull the possibility of tighter policy,
not only from the U.S. Federal Reserve, but also the Bank of
England, not to mention the prospect of a discussion on tapering
from the European Central Bank before the end of the year," he
said.
Opinion:The smart money is refusing to buy big tech stocks now
(http://www.marketwatch.com/story/the-smart-money-is-refusing-to-buy-big-tech-stocks-now-2017-06-15)
Stocks to watch: After a rough few days, big tech names were
mixed with Apple Inc.(AAPL) down 0.7%, Facebook Inc.(FB) edged up
0.2%, and Alphabet Inc.(GOOGL) dropped 0.5%.
Shares of other big retailers were down in the wake of Amazon's
acquisition, with Wal-Mart Stores Inc.(WMT) down 5.1% and Costco
Wholesale Corp. (COST) off 5.8%.
Adamis Pharmaceuticals Corp.(ADMP) fell 2.1% after rising on
news the company's rival to Mylan's EpiPen (MYL) has been approved
by the Food and Drug Administration
(http://www.marketwatch.com/story/adamis-pharma-stock-skyrockets-after-rival-epipen-product-gets-fda-approval-2017-06-15).
Other markets: Gains for the dollar faded, with the ICE U.S.
Dollar Index , which tracks the buck against a basket of six
rivals, down 0.3%.
Asian stocks had a mixed session while European stocks were
mostly higher.
U.S. oil prices rose 0.5%, but were still set for a weekly loss
(http://www.marketwatch.com/story/oil-set-to-add-to-streak-of-weekly-losses-2017-06-16).
Concerns over a global supply glut has been cutting into oil
prices.
(END) Dow Jones Newswires
June 16, 2017 13:57 ET (17:57 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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