The S&P 500 rose 3.76 points Thursday to 1,346.99.
Shares of Amazon dropped 4.68% to $175.83. The company was downgraded Thursday by Morgan Stanley (MS) analysts to equal-weight from overweight.
"We expect Amazon.com's share price to experience downward pressure as the market digests mixed data points," Morgan Stanley analysts wrote in a report Thursday. "Apple's strength in iPhone and iPad sales are negatively affecting Amazon.com by accelerating the company's transition from physical to digital media sales (which has effects on sales, margins and ROIC) as well as impacting Electronics & General Merchandise ("EGM") growth. Additionally, the ongoing share shift from Amazon.com owned-inventory to Third Party ("3P") / Fulfillment by Amazon ("FBA") units may challenge ROIC through decelerating asset turnover and decreased cash flow from negative working capital."Amazon has an estimated price-to-earnings ratio for next year of 44.44; the average for broad-line retailers is 27.43. For comparison, Wal-Mart (WMT) and Costco (COST) both have lower forward P/Es of 12.69 and 19.21, respectively. Twenty-three of the 40 analysts who cover Amazon rated it a buy. Sixteen gave it a hold rating and one rated it a sell. TheStreet Ratings gives Amazon a C+ grade with a hold rating. The stock has risen 1.74% year to date.