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 17:21 ET (21:21 GMT)
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