Mid-Afternoon Market Update: Kroger Falls Following Amazon–Whole Foods Deal; Hornbeck Offshore Shares Spike Higher

Toward the end of trading Friday, the Dow traded up 0.02 percent to 21,364.53 while the NASDAQ declined 0.15 percent to 6,156.46. The S&P also fell, dropping 0.07 percent to 2,430.65.

Leading and Lagging Sectors

Energy shares rose by 0.78 percent in the US market on Friday. Top gainers in the sector included Baytex Energy Corp (USA) BTE, Hornbeck Offshore Services, Inc. HOS, and Plains All American Pipeline, L.P. PAA.

In trading on Friday, cyclical consumer goods & services shares fell by 1.15 percent. Meanwhile, top losers in the sector included Sonic Automotive Inc SAH, down 9 percent, and American Axle & Manufact. Holdings, Inc. AXL, down 9 percent.

Top Headline

Amazon.com, Inc. AMZN on Friday announced its $13.7 billion acquisition of Whole Foods Market, Inc. WFM, a $42-per-share transaction pending approval by the target’s shareholders.

The deal is expected to close in the latter half of 2017.

Equities Trading UP

Whole Foods Market, Inc. WFM shares shot up 29 percent to $42.65 after Amazon announced its plans to acquire Whole Foods for $42 per share.

Shares of Celsion Corporation CLSN got a boost, shooting up 41 percent to $2.90 after withdrawing stock offering.

Hornbeck Offshore Services, Inc. HOS shares were also up, gaining 29 percent to $2.54 after the company reported a $300 million credit facility.

Equities Trading DOWN

Kroger Co KR shares dropped 11 percent to $21.75 following news of Amazon’s acquisition of Whole Foods Market. JP Morgan downgraded Kroger from Overweight to Neutral, while Telsey Advisory Group downgraded the stock from Outperform to Market Perform.

Shares of SUPERVALU INC. SVU were down 14 percent to $3.25 following news of Amazon’s acquisition of Whole Foods Market.

Booz Allen Hamilton Holding Corporation BAH was down, falling around 19 percent to $32.02. The management and technology consulting services firm to the U.S. government and large corporations is being investigated for possible cost accounting and cost charges violations. Raymond James downgraded Booz Allen from Outperform to Market Perform, while Drexel Hamilton downgraded the stock from Buy to Hold.

Commodities

In commodity news, oil traded up 0.52 percent to $44.69 while gold traded up 0.10 percent to $1,255.80.

Silver traded down 0.25 percent Friday to $16.675, while copper rose 0.06 percent to $2.582.

Eurozone

European shares closed higher today. The eurozone’s STOXX 600 climbed 0.66 percent, the Spanish Ibex Index rose 0.56 percent, while Italy’s FTSE MIB Index surged 0.45 percent. Meanwhile the German DAX gained 0.48 percent, and the French CAC 40 climbed 0.89 percent while U.K. shares rose 0.60 percent.

Economics

Housing starts dropped 5.5 percent to an annual rate of 1.09 million in May. However, economists were expecting a rate of 1.22 million for May. Building permits declined 4.9 percent to an annual rate of 1.17 million in May.

The University of Michigan's consumer sentiment index declined to 94.50 in June, versus a prior reading of 97.10. However, economists were expecting a reading of 97.10.

The total number of active U.S. rigs rose by 6 to 933 rigs this week, Baker Hughes Inc reported.