Amazon set to purchase Whole Foods for $13.7 billion
U.S. stocks were pressured on Friday as consumer staples suffered, following a key consumer sentiment data showing confidence at weakest since November
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But Wall Street's spotlight was mostly on Amazon.com which announced plans to buy Whole Foods Market Inc. for $13.7 billion.
Shares of Amazon.com Inc.(AMZN) rose 3% after the announcement. Shares of Whole Foods Market Inc.(WFM) were soaring 28%., but the broader consumer-staples sector was sinking.
The S&P 500 edged down a point to 2,430, with Consumer staples down 1.2% (http://www.marketwatch.com/story/consumer-staples-stocks-on-track-for-worst-daily-drop-in-6-months-as-amazon-eyes-whole-foods-merger-2017-06-16), weighing on the main indexes.
The Dow Jones Industrial Average bucked the downdraft to rise 12 points , or less than 0.1%, at 21,372. The Nasdaq Composite dipped 14 points, or 0.2%, to 6,151.
For the week, the Nasdaq Composite is set to book a loss of about 1%. The S&P 500 is mostly flat for the week and the Dow is on track to log a 0.5% gain over the week.
Meanwhile, the University of Michigan consumer-sentiment index fell to 94.5 in early June reading, the weakest since November.
Softer-than-expected data on U.S. housing starts didn't help the tone. 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.
"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.
Wall Street could see increased volatility later in the session as it is a quadruple-witching day, which means the simultaneous expiration of stock-index futures and options, as well as stock options and single-stock futures.
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)
Wall Street stocks slipped Thursday (http://www.marketwatch.com/story/us-stocks-poised-to-slide-as-fed-signals-full-steam-ahead-on-ending-easy-money-2017-06-15), driven by yet another decline for big-cap technology names, including Amazon.com, though indexes bounced off lows. The Dow industrials and S&P 500 suffered modest declines, while the Nasdaq Composite fell 0.5%.
Opinion:Equity-allocation indicator flashes bear-market warning (http://www.marketwatch.com/story/equity-allocation-indicator-flashes-bear-market-warning-2017-06-16)
Still, the fact that the S&P 500 remains above its main moving averages and they point to further upside is encouraging, according to Frank Cappelleri, a technical strategist at Instinet LLC.
The key number to watch, he said, is 2,400 which was a previous resistance level that took six weeks to break through. If buying emerges as the large-cap index nears that level, 2,400 will become a crucial-support area.
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 was not an ongoing 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).
Dallas Federal Reserve President Rob Kaplan will appear in a moderated question-and-answer session at the Park Cities Rotary Club in Dallas at 12:45 p.m. Eastern.
Investors will likely be parsing those comments for clues about this week's Fed meeting, which resulted in an interest-rate rise, a pledge to start easing the throttle on its stimulus program and indications that another rate increase is in the pipeline.
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: After a rough few days, big tech names were mixed with Apple Inc.(AAPL) down 0.7%, Facebook Inc.(FB) edged up 0.2%, and Alphabet Inc. (GOOGL) dropped 0.5%.
Shares of other big retailers were down in the wake of Amazon's acquisition, with Wal-Mart Stores Inc.(WMT) down 5.1% and Costco Wholesale Corp. (COST) off 5.8%.
Adamis Pharmaceuticals Corp.(ADMP) fell 1% after rising on news the company's rival to Mylan'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 0.2%.
Asian stocks had a mixed session while European stocks were mostly higher.
U.S. oil prices rose 0.6%, but were still set for a 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. Investors will get weekly U.S. oil-rig data later from Baker Hughes Inc. (BHI)
(END) Dow Jones Newswires
June 16, 2017 12:57 ET (16:57 GMT)