Business

Amazon-Whole Foods deal hits retail stocks

NYSE trader Image copyright Reuters

Retail stocks tumbled on Friday as investors digested the news that Amazon had agreed to buy upmarket grocer Whole Foods for $13.7bn.

Markets closed little changed, in spite of steep declines in supermarket chains, with Kroger down 9.2%, and Target and Walmart falling about 5%.

Shares in Amazon rose 2.4% while Whole Foods jumped 29% to $42.68, above the price of Amazon's bid.

Analysts said the deal was potentially a seismic shift in the sector.

The S&P 500 index held steady edging up 0.69 points to close at 2,433.15 in early trade.

The Dow Jones climbed 0.11% to 21,384.28, while the Nasdaq slid 13.74 points to 6,151.76.

A report from the US census also showed new housing construction slowed in May, a sign of economic weakness that pushed Treasury yields lower.