Stocks slip, breaking eight-week win streak
Stocks fell Friday for the second day in a row, which hadn’t happened in a month, as Amazon put a scare into yet another industry: medical device and healthcare equipment companies.
Those firms slumped after an analyst said Amazon might be on the verge of shaking up their industry by speeding up distribution and cutting prices. Energy companies gave up some of their recent gains. Retailers, media companies and household goods firms rose. Stocks finished the week with small losses, ending an eight-week winning streak.
One factor in those losses was uncertainty over the Republican plan to cut taxes.
“We would expect a little bit more of that as we get more delays and uncertainty in the tax plan,” said Sean Lynch, the co-head of global equity strategy for Wells Fargo Investment Institute. Lynch said an eventual tax cut for companies, and for at least some individuals, would give investors “a dose of confidence” that company earnings will grow a bit faster and the economy and stock market will rise a bit longer.
The Standard & Poor’s 500 index set an all-time high Wednesday, but it finished the week down 0.2%. The index had gained 5% over its winning streak, the longest in almost four years. The Russell 2000, which is composed of smaller companies that might benefit more from a corporate tax cut, fell 1.3% this week. That was its largest loss in three months.
Citi Investment Research analyst Amit Hazan wrote Friday that Amazon is making quick progress in the medical supply field and could soon start distributing goods to hospitals.
“New online distribution/ wholesaling models like Amazon’s will come to dominate the supply chain” in coming years, Hazan said.
Baxter International, which sells intravenous pumps and other hospital equipment, fell 2.1% to $64.04. Becton, Dickinson & Co. slid 2.3% to $219.23. Medical device maker Medtronic retreated 1.8% to $79.33.
In recent weeks, healthcare product firms, medication distributors and drugstores have fallen as Wall Street wondered what Amazon’s logistics expertise and its willingness to slash prices will do to their businesses. Drugstores CVS and Walgreens jumped Friday; investors may be relieved that Amazon could turn its focus to industries they are less involved in.
Long-suffering department stores made gains Friday. J.C. Penney jumped 15.3% to $3.17 after it said a closely watched sales measurement grew for the first time in more than a year and reported a smaller quarterly loss than expected. Macy’s built on its Thursday jump, climbing 2.5% to $19.98. Kohl’s rose 4.5% to $43.04.
Disney rose 2% to $104.78 after it said it received bigger payments from cable companies for ESPN and offered details about its planned sports streaming services.
U.S. crude oil fell 43 cents to $56.74 a barrel. Brent crude fell 41 cents to $63.52 a barrel. Wholesale gas fell 1 cent to $1.81 a gallon. Heating oil fell 1 cent to $1.93 a gallon. Natural gas rose 1 cent to $3.21 per 1,000 cubic feet.
Bond prices slumped. The yield on the 10-year Treasury note rose to 2.38% from 2.34%.
Gold fell $13.30, or 1%, to $1,274.20 an ounce. Silver fell 10 cents to $16.87 an ounce. Copper fell 1 cent to $3.08 a pound.
The dollar rose to 113.54 yen from 113.32 yen. The euro fell to $1.1618 from $1.1643.