U.S. Stocks Slide as Consumer Staples Fall

By Riva Gold Features Dow Jones Newswires

U.S. stocks slipped Friday, dragged lower by the consumer staples sector after Amazon.com agreed to buy organic grocer Whole Foods Market Inc.

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The Dow Jones Industrial Average fell 28 points, or 0.1%, to 21332 shortly after the opening bell. The S&P 500 dropped 0.1%, and the Nasdaq Composite declined 0.3%.

The S&P 500's consumer staples sector fell 1.2%. Kroger shares dropped 15%, Target fell 11% and Wal-Mart Stores declined 5.8%. Amazon, which agreed to pay $13.7 billion for Whole Foods, added 3.1%. Whole Foods shares were halted.

U.S. stocks have come under pressure in recent sessions as high-flying technology shares have dropped. The sector declined again Friday in the S&P 500, off 0.4%.

"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," he said.

Despite a wobble in some of this year's best performing stocks, equities posted their greatest weekly inflows this year, 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's seen among investors, with many clients waiting for any pullbacks in the market to add to their stock holdings. Fund managers surveyed by Bank of America increased cash in their portfolios in June, bringing their cash allocations well above the historical average.

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Elsewhere Friday, Japanese stocks closed higher after the Bank of Japan kept its policy unchanged and sent the yen lower, while the Stoxx Europe 600 was up 0.5% as shares of Nestlé jumped after the Swiss-based consumer giant put its U.S. confectionery business up for sale.

Markets in Europe and Asia also benefited from a recent climb in the dollar, higher oil prices and news of a long-sought Greek bailout deal, analysts said. Yields on 10-year Greek debt fell to 5.577% from 5.772% Thursday after Greece's creditors agreed to release the next tranche of its bailout, but put off a final decision on relieving its debt burden until August 2018. The International Monetary Fund also agreed on new measures for Greece.

Greece's default risk looks lower than it has in a while and its economy appears to be showing signs of stability, said Michael Collins, investment officer at PGIM Fixed Income.

Government bonds elsewhere were mostly slightly higher, with 10-year German yields at 0.297% from 0.284% on Thursday and U.S. Treasurys at 2.171% from 2.160%. Yields move inversely to prices.

A recent climb in the dollar also boosted shares of exporters in Europe and Asia, particularly in Japan. The WSJ Dollar Index was flat Friday after climbing significantly following the Federal Reserve's Wednesday meeting, where officials signaled further interest rate rises ahead.

The dollar rose 0.4% against the yen and Japan's Nikkei Stock Average climbed 0.6% after the Bank of Japan said it would maintain its aggressive monetary stimulus as expected. Bank of Japan Governor Haruhiko Kuroda pushed back against calls for details on how the bank might unwind its easing policy.

"We are still not in the condition in which we should be discussing normalization or exit," he said.

The Shanghai Composite Index fell 0.3% even as China's central bank boosted market liquidity by making the largest single-day cash injection into the financial system since mid-January. Investors' focus remained on Anbang Insurance Group, whose chairman was allegedly detained by Chinese authorities.

In commodities, Brent crude oil was up 1.3% at $47.51 a barrel, while gold inched up 0.2% to $1,256 an ounce.

--Lucy Craymer, Nektaria Stamouli and Megumi Fujikawa contributed to this article.

Write to Riva Gold at riva.gold@wsj.com

(END) Dow Jones Newswires

June 16, 2017 09:57 ET (13:57 GMT)