AP Photo/Mark Lennihan, File

Market Watch: US stocks are mixed; Amazon shakes up health care, delivery

June 28, 2018 - 11:58 am
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By MARLEY JAY, AP Markets Writer

NEW YORK (AP) — U.S. stocks are mixed Thursday a day after they gave up an early gain and fell to their lowest level in a month. Amazon said it's buying an online pharmacy and launching its own delivery van business, and drugstores and medication distributors as well as delivery companies are sinking. Technology companies are higher and U.S. crude oil is at its highest price since late 2014.

KEEPING SCORE: The S&P 500 index added 9 points, or 0.3 percent, to 2,708 as of 11:30 a.m. Eastern time. The Dow Jones Industrial Average rose 50 points, or 0.2 percent, to 24,167. The Nasdaq composite gained 30 points, or 0.4 percent, to 7,475. The Russell 2000 index of smaller-company stocks dipped 2 points, or 0.2 percent, to 1,637.

The New York Stock Exchange was split about 50-50 between winners and losers.

Investors continue to react to hints about the outcome of trade disputes and their views sometimes shift by the hour. On Wednesday stocks initially rose after President Donald Trump dropped plans to impose strict limits on Chinese investment in U.S. technology companies. Those gains evaporated and stocks finished with a loss of 0.9 percent after Larry Kudlow, Trump's top economic adviser, said in an interview with Fox Business that those comments should not necessarily be viewed as a softer stance. The S&P 500 closed at its lowest level since May 29. The U.S. is set to impose a 25 percent tariff on billions of dollars of Chinese products starting July 6. In response, China will raise import duties on $34 billion worth of American goods.

AMAZON STRENGTH: Amazon shook up multiple industries Thursday after it said it's buying online pharmacy PillPack, which offers pre-sorted dose packaging and home delivery. Investors expected Amazon to use its muscle to reduce costs and drug prices, and that led to sharp losses for drugstores, pharmacy benefits managers and companies that distribute medications.

Amazon rose 1.4 percent to $1,684.19 while Walgreens fell 9.2 percent to $60.16, and CVS, a drugstore operator and pharmacy benefits manager, skidded 7.9 percent to $64.54. Medication distributor Cardinal Health shed 6.3 percent to $49.59.

Amazon also announced a new program under which contractors around the country can launch businesses that deliver Amazon packages, meaning Amazon will have new ways to deliver products without relying on companies like UPS and FedEx. UPS lost 2.4 percent to $105.75 and FedEx declined 2.3 percent to $224.55.

STRATEGY SHIFTS: Madison Square Garden Co. said it will consider spinning off its sports division, which owns the NBA's New York Knicks and the NHL's Rangers, into a separate publicly traded company. The stock jumped 10.5 percent to $294.26.

Mexican food chain Chipotle said it will restructure its business, closing some restaurants that are struggling and making changes to its menu. It expects up to $135 million in total costs. Analysts and investors took the news as a sign it's going to take more time before Chipotle's business improves substantially. The shares lost 8.6 percent to $417.94.

TECH LEADING: Consulting company Accenture rose 6.1 percent to $164.80 after a strong first quarter. Elsewhere, chipmaker Nvidia added 1.4 percent to $239.01 and payment processor Mastercard added 1.5 percent to $196.13.

Bermuda-based chipmaker Marvell Technology climbed 7.4 percent to $21.61 after it said Chinese regulators approved its $6 billion purchase of competitor Cavium. Cavium jumped 9.3 percent to $86.65.

ENERGY: Benchmark U.S. crude continued to surge and gained 1.2 percent to $73.64 a barrel in New York. It's at its highest price since November 2014. Brent crude, used to price international oils, rose 0.2 percent to $77.64 a barrel in London.

BIG SALE: BJ's Wholesale Club jumped after the company went public again. The stock started trading at $17 a share, at the high end of the company's projections, and then advanced 26 percent to $21.43. BJ's was taken private in 2011.

ECONOMIC GROWTH: The Commerce Department said the U.S. economy grew just 2 percent from January to March, slower than it previously estimated, as consumer spending and business inventories were weaker. But experts think the current quarter, which ends Saturday, is going to be much stronger thanks to an increase in spending by consumers.

BONDS: Bond prices inched lower. The yield on the 10-year Treasury note rose to 2.84 percent from 2.83 percent.

CURRENCIES: The dollar rose to 110.35 yen from 110.20 yen. The euro rose to $1.1591 from $1.1557.

OVERSEAS: Germany's DAX was down 1.4 percent France's CAC 40 shed 1 percent. Britain's FTSE 100 lost 0.3 percent.

Japan's benchmark Nikkei 225 index remained almost flat and South Korea's Kospi lost 1.2 percent. Hong Kong's Hang Seng added 0.5 percent.

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