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Amazon deal slams retailers as Dow edges to record

WT24 Desk

Food and retail stocks floundered Friday on news of Amazon’s takeover of Whole Foods Market, but the Dow edged to a fresh record on gains in energy shares, AFP reports.

Investors smiled on the two parties in Amazon’s $13.7 billion purchase of Whole Foods, sending Whole Foods’ stock up 29.1 percent and Amazon 2.4 percent higher.

But the market punished other retailers, including Wal-Mart Stores, which lost 4.7 percent, amid expectations the deal would sharpen price competition in the industry, denting profits.

But gains of more than one percent by oil companies ExxonMobil and Chevron, and commodity-oriented industrial Caterpillar, helped lift the Dow 0.1 percent to close at 21,384.28, eking out a new record.

The broad-based S&P 500 rose a hair to end at 2,433.15, while the tech-rich Nasdaq Composite Index lost 0.2 percent to 6,151.76.

“Obviously the big news today is the Amazon announcement of the purchase of Whole Foods which is having effects on various sectors of the market,” said David Levy portfolio manager at Republic Wealth Advisors.

Among the shares hammered by the news, supermarket chain Kroger lost 9.2 percent, big-box retailer Target fell 5.1 percent, and drugstore chain CVS Health dropped 3.8 percent.

Food companies Mondelez and Kellogg lost about 1.5 percent each.

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