Amazon deal hits grocery stocks

Amazon’s deal to buy Whole Foods Market sent grocery stores, big retailers, and food makers and distributors plunging Friday. Energy companies rose. Other stocks were little changed. Major U.S. indexes were mixed, and the Dow Jones industrial average edged up to a new record.

It’s rare for a single deal to have a big effect on the broader stock market, but the Amazon-Whole Foods deal did. Investors wondered if Amazon will do to grocery stores and supermarkets what it’s done to sellers of goods such as clothing and office supplies: force them to make big changes or be supplanted.

Neil Saunders, managing director of the research firm Global Data Retail, said Amazon is likely to push supermarkets and grocery stores to slash prices, which will affect the companies that make and distribute those products.

Elsewhere, energy companies rose as oil futures bounced back from their lowest price this year, and utilities and industrial and basic materials ground out modest gains.

After the Amazon-Whole Foods deal was announced, investors dumped retailers, drugstores and discount chains. Many of those stores have started trying to sell more groceries in the last few years.

Wal-Mart had its worst day in more than a year, falling 4.7% to $75.24. Costco had its biggest drop in almost six years, sinking 7.2% to $167.11. Target tumbled 5.1% to $52.61.

Supermarkets and grocery stores had also plunged Thursday after Kroger cut its annual forecast. Kroger, which dived 19% on Thursday, fell 9.2% on Friday to a three-year low of $22.29. Sprouts Farmers Market skidded 6.3% to $21.01.

Campbell Soup fell 3.4% to $55.05. General Mills fell 2.9% to $57.10. United Natural Foods dropped 11% to $35.39.

Whole Foods jumped 29.1% to a two-year high of $42.68. Amazon climbed 2.4% to $987.71.

Benchmark U.S. crude rose 28 cents to $44.74 a barrel. Brent crude, used to price international oils, climbed 45 cents to $47.37 a barrel. Occidental Petroleum shares jumped 4.1% to $61.83 and Chevron gained 1.9% to $108.35.

Wholesale gasoline increased 2 cents to $1.45 a gallon. Heating oil rose 1 cent to $1.43 a gallon. Natural gas fell 2 cents to $3.04 per 1,000 cubic feet.

Defense contractor Booz Allen Hamilton slid 18.9% to $31.90 after it said the Justice Department is investigating its accounting practices and the way it charges the U.S. government. The company said it is cooperating with the investigation and its own auditing hasn’t turned up any major erroneous costs or problems.

Bond prices rose. The yield on the 10-year Treasury note fell to 2.16% from 2.17%.

Gold climbed $1.90 to $1,256.50 an ounce. Silver slipped 6 cents to $16.66 an ounce. Copper stayed at $2.56 a pound.

The dollar rose to 110.84 yen from 110.79 yen. The euro rose to $1.1195 from $1.1155.