Shares of retailers fell Friday after Amazon.com said it would buy Whole Foods Market, potentially squeezing their competitors.
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Grocers were already under pressure after Kroger, the nation's biggest supermarket chain, warned of disappointing earnings a day earlier. Retailers from traditional grocers to big-box operators tumbled Friday on fears that Amazon would do to them what it did to bookstores, analysts and fund managers said.
"This is a shot across the bow," said Sean Lynch, co-head of global equities at the Wells Fargo Investment Institute. "The worry is that Amazon is going to impact the market, drive margins down."
The giant internet retailer's stock rose 3%, while Whole Foods shares jumped 30%.
Rival grocers Supervalu and Kroger both tumbled more than 10%, capping a brutal week for the industry. Kroger shares sank Thursday after it said increasing competition will hurt earnings for the year. That competition isn't letting up -- this week German grocery chain Lidl opened its first stores in the U.S.
Big-box operators such as Wal-Mart Stores and Target fell nearly 5% and 7%, respectively, on Friday.
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Food and staples companies in the S&P 500 were down 5.9% so far this week, on track for the group's worst weekly decline in nearly two years.
Technology stocks also slipped, extending losses for a sector that has been under pressure lately.
The tech-heavy Nasdaq Composite fell 0.2% Friday, on track for a 0.9% weekly loss, while the S&P 500 declined 0.1%. Meanwhile, the Dow Jones Industrial Average rose 5.5 points, or less than 0.1%, to 21365.
Tech remains the best-performing S&P 500 sector in the index in 2017, up 17% year-to-date. But some recent sessions have been rough for the group.
Since June 8, declines in stocks including Apple and Google parent Alphabet have dragged the sector down nearly 4% as investors pulled back from one of the most profitable trades of the year so far. The sector was on track for its third consecutive session of declines Friday.
"Tech has done exceptionally well this year," said Yogi Dewan, chief executive at Hassium Asset Management, pointing to signs of solid revenue growth in the sector. "But at these valuations, we're not putting new money into it," Mr. Dewan said.
Despite a wobble in some of this year's best-performing stocks, both U.S. and global equities posted their biggest weekly inflows this year in the week ended June 14, according to EPFR Global data.
Mr. Dewan said pullbacks this year have been short and overall volatility has been low because of the high cash levels he has seen among investors, with many clients waiting for any drop in the market to add to their stockholdings.
Fund managers surveyed by Bank of America increased cash in their portfolios in June, bringing their cash allocations well above the historical average.
Government bond yields steadied on Friday after an eventful week. The yield on the 10-year Treasury note eased to 2.157% Friday from 2.160% on Thursday. Earlier in the week, yields dropped following weaker-than-expected inflation data, then retraced some of that decline after Federal Reserve officials signaled further interest-rate increases at Wednesday's meeting. Yields fall as prices rise.
Energy stocks climbed Friday as the price of oil bounced recovered. U.S.-traded crude rose 0.6% to $44.74 a barrel Friday, but prices have fallen more than 11% over the past four weeks.
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(END) Dow Jones Newswires
June 16, 2017 16:08 ET (20:08 GMT)