Shares of retailers fell during a heavy day of trading 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 biggest supermarket chain in the U.S., 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 $23.54, or 2.4%, to $987.71 Friday, while Whole Foods shares jumped 9.62, or 29%, to 42.68.
Rival grocers Supervalu and Kroger both tumbled, capping a brutal week for the industry. Kroger shares sank 19% Thursday after it said increasing competition would 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.
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Big-box operators such as Wal-Mart Stores and Target fell roughly 5% on Friday.
Food and staples companies in the S&P 500 shed 5.5% during the week, 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 13.74 points, or 0.2%, to 6151.76 Friday, notching a 0.9% weekly loss. Meanwhile, the Dow Jones Industrial Average closed at a record, rising 24.38 points, or 0.1%, to 21384.28 and the S&P 500 added 0.69 point, or less than 0.1%, to 2433.15 on the largest-volume day of 2017 for stock trading on major U.S. exchanges.
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.
Declines in stocks including Apple and Google parent Alphabet have dragged the sector down 3.4% over the past two weeks -- its biggest such decline since Brexit.
"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.
Among the tech companies that fell in the past week: Snap, one of the most-anticipated initial public offerings in recent years. The parent of disappearing-message app Snapchat closed down at its $17 IPO price on Thursday and rose 54 cents, or 3.2%, to 17.54 on Friday, shedding 3% for the week.
Medical-robotics maker Myomo ended its first week of trading up 5.45, or 61%, at 14.45. Myomo was the first company to list on a major U.S. exchange through a provision of federal law known as Reg A+, which was designed to help fund small-business growth.
Despite the recent 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.
U.S. 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 decided to raise interest rates at Wednesday's meeting and signaled further increases. Yields fall as prices rise.
Energy stocks climbed Friday as the price of oil rose slightly. U.S.-traded crude added 0.6%, to $44.74 a barrel Friday, but prices have fallen more than 11% over the past four weeks on oversupply concerns.
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(END) Dow Jones Newswires
June 16, 2017 17:34 ET (21:34 GMT)