NEW YORK (AP) – U.S. stocks are lower Friday as Amazon’s $13.4 billion deal for Whole Foods Market is sending grocery stores, big retailers, and food makers and distributors sharply lower. Amazon and Whole Foods are both climbing. Energy companies are rising as the price of oil moves higher and smaller companies are down.
KEEPING SCORE: The Standard & Poor’s 500 index lost 7 points, or 0.3 percent, to 2,424 as of 11:15 a.m. Eastern time. The Dow Jones industrial average edged down 29 points, or 0.1 percent, to 21,330. The Nasdaq composite fell 38 points, or 0.6 percent, to 6,127. The Russell 2000 index of smaller company stocks shed 11 points, or 0.8 percent, to 1,399.
GROCERY SHOPPING: Online juggernaut Amazon said it will buy organic grocery company Whole Foods for about $13.4 billion, or $42 a share. Whole Foods Market had been the target of sale rumors for two months, boosting its stock. The shares last traded at $42 about two years ago. Whole Foods jumped $8.91, or 27 percent, to $41.97 while Amazon climbed $30.16, or 3.1 percent, to $994.33.
TERROR IN THE AISLES: Amazon has tested grocery stores of its own and also offers Prime Fresh, a $299-a-year grocery delivery service. It’s also something of a unique threat to grocery stores, food producers and other kinds of retailers because Amazon doesn’t mind losing money. Amazon might be able to sell inexpensive groceries as it makes its money from its online marketplace, and do to big grocery stores what it’s done to many other retailers.
Investors responded by dumping the stocks of major retailers and grocery store operators. Four of the five biggest losses in the S&P 500 index in early trading were retailers: Kroger, Target, Costco and Wal-Mart Stores.