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US: Wall Street dips as Amazon-Whole Foods deal slams retailers
[BENGALURU] 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$13.7 billion deal to buy upscale grocer Whole Foods.
The deal rattled the retail sector. The S&P 500 consumer staples index dropped 1.14 per cent, weighed down by Wal-Mart, Costco and Kroger.
Wal-Mart, which also announced a deal to buy online clothing retailer Bonobos for US$310 million, dropped five per cent and weighed the most on the S&P 500 and the Dow.
Amazon shares were up 3.4 per cent at US$997.84, while Whole Foods surged 27.7 per cent.
"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 - and they see that people don't necessary go to the grocery store anymore."
At 9.48 am ET the Dow Jones industrial average was down 25.06 points, or 0.12 per cent, at 21,334.84, the S&P 500 was down 4.96 points, or 0.20 per cent, at 2,427.5 and the Nasdaq Composite was down 17.47 points, or 0.28 per cent, 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 per cent 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 per cent 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 three per cent 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.