By Sue Chang and Barbara Kollmeyer, MarketWatch
Amazon makes a $13.7 billion bid for Whole Foods
The Dow Jones Industrial Average on Friday notched its 21st
record of 2017 led by a late-stage rise in energy shares, as Amazon
announced plans to buy Whole Foods-- one of the buzziest mergers of
2017.
However, the tech-heavy Nasdaq Composite ended lower and booked
a second-straight weekly loss, extending what has proven a painful
weekly stretch for tech';s highfliers.
The Dow Jones Industrial Average gained 24.38 points, or 0.1%,
to 21,384.28--a new all-time high. The blue-chip index's climb was
on the back of a jump in shares of Chevron Corp.(CVX) and Exxon
Mobil Corp.(XOM) , gaining 1.9% and 1.5% respectively. For the
week, the index climbed 0.5%.
The S&P 500 ended less than a point higher at 2,433.14, as
the surge in energy, up 1.7%, more than offset a drop in consumer
staples, down 1%, as Whole Foods's rivals, notably Kroger Co. (KR)
and Costco Wholesale Corp. (COST), retreated sharply on the news of
its $13.7 billion deal.
Shares of Amazon.com Inc. (AMZN) rose 2.3% after the
announcement, while shares of Whole Foods Market Inc. (WFM) soared
29%.
The broad-market index ended the week roughly where it
started.
The weakest performer among the main equity benchmarks, the
Nasdaq Composite Index dipped 13.74 points, or 0.2%, to 6,151.76
and lost 1% over the week, as technology stocks continued to come
under pressure, amid concerns that that group is overvalued.
Softer-than-expected data on U.S. housing starts didn't help the
tone in early trade, with investor sentiment less than optimistic.
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.
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)
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: Shares of big retailers were down sharply in
the wake of Amazon's acquisition, with Wal-Mart Stores Inc.(WMT)
down 4.6% and Costco Wholesale off 7.2%.
Kroger shares tumbled 9.2% on Friday, bringing weekly losses to
28%, on the back of the Amazon deal and its own disappointing
quarterly results.
Adamis Pharmaceuticals Corp.(ADMP) reversed gains, closing 0.6%
lower after rising on news the company's rival to Mylan N.V.'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 ended
higher.
U.S. oil prices rose 0.5%, but booked a 2% 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. Gold prices , meanwhile, settled slightly higher on Friday
but booked a weekly decline
(http://www.marketwatch.com/story/gold-tips-higher-but-on-track-for-back-to-back-weekly-loss-2017-06-16)
as the Fed affirmed its plan to stay the course on lifting interest
rates.
(END) Dow Jones Newswires
June 16, 2017 16:53 ET (20:53 GMT)
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