* U.S. stocks drop on Amazon.com, Whole Foods deal
* Dollar index lower after U.S. economic data
* Bond yields also down after data; oil edges higher
(Updates with U.S. trading; changes dateline, previous LONDON)
By Caroline Valetkevitch
NEW YORK, June 16 U.S. stocks fell on Friday
after Amazon.com's announcement it would buy Whole Foods Market
hit the shares of Wal-Mart and grocers, while disappointing U.S.
economic data hurt the dollar and U.S. Treasury yields.
The S&P 500 consumer staples index, down 1.6
percent, was the biggest drag on the benchmark S&P 500 stock
index. Bucking broader declines on news of the deal, Amazon
shares surged 3 percent while Whole Foods shot
up 27.2 percent.
"The uncertainty over the impact of Amazon on the food
industry is upsetting the market," said Bruce Bittles, chief
investment strategist at Robert W. Baird & Co in Sarasota,
Indeed, the deal sent shockwaves through the food
distribution market, hurting stocks like Wal-Mart, which
slid 5.3 percent, Kroger, which tumbled 13.1 percent, and
Costco Wholesale, which fell 6.1 percent.
"The Amazon news is significant because it could be a game
changer in terms of how the food industry operates," though the
share price reaction of Wal-Mart and other stocks appeared
overdone, Bittles said.
The Dow Jones Industrial Average was down 2.73
points, or 0.01 percent, to 21,357.17, the S&P 500 lost
3.94 points, or 0.16 percent, to 2,428.52 and the Nasdaq
Composite dropped 20.63 points, or 0.33 percent, to
MSCI's index of stock markets across the world
inched up 0.2 percent, while European shares
added 0.5 percent, rebounding from recent losses.
In the foreign exchange market, the U.S. dollar fell
against a basket of key currencies; it was down 0.3 percent
after the day's data, which raised concerns about spending.
U.S. homebuilding fell for a third month in May to the
lowest in eight months as construction activity declined
broadly, while the University of Michigan said its barometer on
U.S. consumer sentiment unexpectedly fell in early June.
The Japanese yen reversed course against the dollar
after earlier sliding to a two-week low, when the Bank of Japan
left its mass money printing program unchanged, maintaining the
contrast with the U.S. Federal Reserve, which signaled further
tightening this week.
The weaker-than-expected U.S. data also weighed on U.S.
Treasury yields as it fueled uncertainty about the U.S. rate
Benchmark 10-year Treasuries were last up 2/32
in price to yield 2.153 percent, compared with 2.162 percent
In commodities, oil edged up but remained on track for
losses for the week on persisting worries over the glut in
Brent was up 0.6 percent at $47.20 a barrel while
U.S. crude was up 0.5 percent at $44.66.
For Reuters Live Markets blog on European and UK stock
markets see reuters://realtime/verb=Open/url=http://emea1.apps.cp.extranet.thomsonreuters.biz/cms/?pageId=livemarket
(Additional reporting by Marc Jones in London; Nichola
Saminather in Singapore; Editing by Bernadette Baum)