The tech-heavy Nasdaq declined by 0.22%, its third consecutive day of losses. But the Dow Jones Industrial Average gained 0.11% to finish at a record high. The S&P 500 rose slightly, up 0.03%.
Amazon announced that it will acquire Whole Foods for $42 a share in an all-cash transaction valued at $13.7 billion. John Mackey, Whole Foods co-Founder and CEO, said the merger "presents an opportunity to maximize value for Whole Foods Market's shareholders." Whole Foods will retain its current headquarters in Austin, Texas, and Mackey will stay on as CEO.
Other retail and supermarket names were sent lower on the deal. Walmart Stores Inc. (WMT) , Target Corp. (TGT) , Costco Wholesale Corp. (COST) , Casey's General Stores Inc. (CASY) , Sprouts Farmers Market Inc. (SFM) , Supervalu Inc. (SVU) and Consumer Staples Select Sector SPDR ETF (XLP) were all lower on Friday.
Earlier, Walmart also announced that it would purchase Bonobos, a menswear company, for $310 million in all-cash deal. The deal is expected to close at the end of the second quarter or beginning of the third.
Supermarket company Kroger (KR) also fell Friday after the Amazon.com-Whole Foods deal news. Additionally, Kroger stock was downgraded this morning to "neutral" from "overweight" at JPMorgan. The firm cut its price target on the stock to $24 from $34 as well. The downgrade comes as JPMorgan is concerned Kroger is facing challenges that go beyond deflation, including greater competition in the space.
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Tech stocks have been mostly lower since late last week after Goldman Sachs warned investors of risks to recent heady gains in the sector. Since then, the FAANG stocks -- Facebook Inc. (FB) , Apple Inc. (AAPL) , Amazon Inc. (AMZN) , Netflix Inc. (NFLX) and Alphabet Inc. (GOOGL) (formerly Google) -- have taken the brunt of the selloff. Before the selloff, those five stocks had been responsible for two-fifths of the S&P 500's gains this year.
Housing starts declined to their lowest level in eight months in May even as overall demand in the U.S. housing sector remained generally robust. Starts declined by 5.5% in May to an annual rate of 1.09 million. Building permits also dropped, declining 4.9% to an annual rate of 1.17 million. Both measures missed expectations -- starts were expected to come in at 1.22 million and permits at 1.24 million.
Consumer sentiment unexpectedly weakened in June, according to a preliminary reading from the University of Michigan. The index of consumer sentiment in the U.S. declined to 94.5 from 97.1 in May, driven by a drop in both current economic conditions and consumer expectations. Economists anticipated a flat reading.
A drop in sentiment was mostly tied to "more negative perceptions of the proposed economic policies among Democrats and the reduced likelihood of passage of these policies among Republicans," the University of Michigan wrote in a statement.
Nike Inc. (NKE) pressured the Dow again on Friday after JPMorgan hit the stock with a downgrade to neutral from overweight and reduced its price target to $58 from $61. Analyst Matthew Boss said he forecasts North America sales slowing amid a tough retail environment. The athletic wear company announced on Thursday, June 15, plans to amp up its direct-to-consumer offerings, as well as job cuts to 2% of its global workforce. Nike fell 1.9% in premarket trading on Friday.
The approval was the last major hurdle the two companies needed to overcome before they could move on to complete their blockbuster deal, which was announced in 2015.
Finisar Corp. (FNSR) moved higher despite an in-line fourth quarter and disappointing guidance. The optical communications company earned 50 cents a share, as expected, while revenue increased 12% to $357.53 million, falling short of consensus by roughly $2 million. Finisar anticipates first-quarter earnings no higher than 43 cents a share, below estimates of 51 cents.
Government contractor Booz Allen Hamilton (BAH) sank after the company announced late Thursday that it faces a federal civil and criminal investigation regarding its finances, CNBC reported. The management, consulting and technology company derives 97% of its income from government clients including the Pentagon and the IRS. This probe will investigate, "cost accounting and indirect cost charging practices with the U.S. government."
Friday fell on a quadruple-witching day, one of four times in the year in which futures and options contracts expire at the same time.
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