A trader works on the floor at the closing bell of the Dow Jones Industrial Average at the New York Stock Exchange on June 15, 2017 in New York. / AFP PHOTO / Bryan R. Smith
NEW YORK: US stocks dipped on Friday as shares of Wal-Mart and other retailers were hammered after Amazon.com announced its entry into the brick-and-mortar retail business with its US$13.7bil (RM58.6bil) deal to buy upscale grocer Whole Foods.
The deal rattled the retail sector. The S&P 500 consumer staples index dropped 1.14%, weighed down by Wal-Mart, Costco and Kroger.
Wal-Mart, which also announced a deal to buy online clothing retailer Bonobos for US$310mil, dropped 5% and weighed the most on the S&P 500 and the Dow.
Amazon shares were up 3.4% at US$997.84, while Whole Foods surged 27.7%.
“Amazon’s got its tentacles everywhere and that’s another place to go,” said Bruce Bittles, chief investment strategist at R.W. Baird & Co.
“Amazon sees that industry changing significantly nd they see that people don’t necessary go to the grocery store anymore.”
At 9:48am ET the Dow Jones industrial average was down 25.06 points, or 0.12%, at 21,334.84, the S&P 500 was down 4.96 points, or 0.20%, at 2,427.5 and the Nasdaq Composite was down 17.47 points, or 0.28%, at 6,148.03.
Four of the 11 major S&P 500 sectors were lower. Technology was the second-biggest drag led by declines in International Business Machines and Apple.
The sector, which had surged 17.4% in 2017, is on track for its biggest weekly decline since June last year as investors booked profits amid worries of stretched valuations.
Booz Allen plunged 18.6% to US$31.99 after the consultancy firm said the US Department of Justice was investigating the company for some of the ways it charged the government for services and accounted for costs.
Dow component Nike were down nearly 3% after JPMorgan downgraded the stock to ”neutral” from ”overweight”.
Declining issues outnumbered advancers on the NYSE by 1,489 to 1,107. On the Nasdaq, 1,586 issues fell and 856 advanced. - Reuters
Limited time offer:
Just RM5 per month.
