By Sue Chang and Barbara Kollmeyer, MarketWatch
Amazon set to purchase Whole Foods for $13.7 billion
U.S. stocks were pressured on Friday as consumer staples
suffered, following a key consumer sentiment data showing
confidence at weakest since November
But Wall Street's spotlight was mostly on Amazon.com which
announced plans to buy Whole Foods Market Inc. for $13.7
billion.
Shares of Amazon.com Inc.(AMZN) rose 3% after the announcement.
Shares of Whole Foods Market Inc.(WFM) were soaring 28%., but the
broader consumer-staples sector was sinking.
The S&P 500 edged down a point to 2,430, 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),
weighing on the main indexes.
The Dow Jones Industrial Average bucked the downdraft to rise 12
points , or less than 0.1%, at 21,372. The Nasdaq Composite dipped
14 points, or 0.2%, to 6,151.
For the week, the Nasdaq Composite is set to book a loss of
about 1%. The S&P 500 is mostly flat for the week and the Dow
is on track to log a 0.5% gain over the week.
Meanwhile, the University of Michigan consumer-sentiment index
fell to 94.5 in early June reading, the weakest since November.
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.
"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.
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)
Wall Street stocks slipped Thursday
(http://www.marketwatch.com/story/us-stocks-poised-to-slide-as-fed-signals-full-steam-ahead-on-ending-easy-money-2017-06-15),
driven by yet another decline for big-cap technology names,
including Amazon.com, though indexes bounced off lows. The Dow
industrials and S&P 500 suffered modest declines, while the
Nasdaq Composite fell 0.5%.
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 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 was
not an ongoing 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).
Dallas Federal Reserve President Rob Kaplan will appear in a
moderated question-and-answer session at the Park Cities Rotary
Club in Dallas at 12:45 p.m. Eastern.
Investors will likely be parsing those comments for clues about
this week's Fed meeting, which resulted in an interest-rate rise, a
pledge to start easing the throttle on its stimulus program and
indications that another rate increase is in the pipeline.
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 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 0.2%.
Asian stocks had a mixed session while European stocks were
mostly higher.
U.S. oil prices rose 0.6%, 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. Investors will get weekly U.S. oil-rig data later from
Baker Hughes Inc. (BHI)
(END) Dow Jones Newswires
June 16, 2017 12:57 ET (16:57 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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