Business

Amazon apparel announcement hits retail stocks

NYSE traders Image copyright Reuters

Tech stocks and retailers were among those posting losses on Tuesday, after e-commerce giant Amazon announced a new clothes shopping service.

The fall weighed on US markets, as most sectors showed declines.

The S&P 500 index fell 0.67% to 2,437.03 and the Dow Jones dipped 0.29% to 21,467.14.

The Nasdaq index, which was buoyed by a tech rally on Monday, dropped 0.82% to 6,188.03.

Amazon on Tuesday said it is testing a service that would allow customers to order boxes of clothes to try-on without paying upfront.

It's a move aimed at eliminating one of the advantages of traditional stores. It also poses a threat to fashion start-ups already pioneering a similar business model.

Shares in department stores, which were already struggling, fell further after the announcement. Kohl's stock slid 4%, Nordstrom dropped 3.95% and Macy's closed down 2.7%.

Amazon shares also declined 0.3%, but that was more in keeping with market-wide trends.

Biotechnology and pharmaceutical firms were among the few winners on Wall Street on Tuesday. The gains in share prices came as Washington looks to the White House to release a plan for grappling with the high costs of prescription drugs.

Reports so far indicate the proposal hews closely to industry desires.