US stocks on two-day losing streak as health stocks fall

NEW YORK (AP) – So that’s what a losing streak feels like. Stocks fell for the second day in a row Friday, which hadn’t happened in a month, as Amazon put a scare into yet another industry: medical device and health care equipment companies.

Those companies slumped after an analyst for Citi Investment Research 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 while retailers, media companies and household goods companies moved higher. 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. Stocks dipped Thursday after Senate Republicans proposed leaving corporate tax rates alone in 2018 before cutting them in 2019. That surprised investors, who pulled stocks down slightly from their recent record highs.

“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 for a bit longer.

The Standard & Poor’s 500 index lost 2.32 points, or 0.1 per cent, to 2,582.30. The Dow Jones industrial average slid 39.73 points, or 0.2 per cent, to 23,422.21. The Nasdaq composite turned higher and rose 0.89 points to 6,750.94. The Russell 2000 index of smaller-company stocks inched up 0.26 points to 1,475.27.

The American flag flies above the Wall Street entrance to the New York Stock Exchange. – AP

The S&P 500 set an all-time high on Wednesday, but finished the week down 0.2 per cent. The index had gained five per cent over its winning streak, the longest in almost four years. The Russell 2000, which is comprised of smaller companies that might benefit more from a corporate tax cut, fell 1.3 per cent 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, as some organisations appear interested in working with the online retail giant.

“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 $1.35, or 2.1 per cent, to $64.04. Becton, Dickinson dipped $5.25, or 2.3 per cent, to $219.23. Medical device maker Medtronic slid $1.48, or 1.8 per cent, to $79.33.

Competition with Amazon has hurt retailers for years and the online giant has also pressured supermarkets and grocery stores with its purchase of Whole Foods. In recent weeks, health care product companies, medication distributors and drugstores have all 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. JC Penney advanced 42 cents, or 15.3 per cent, to $3.17 after it said a closely-watched sales measurement grew for the first time in more than a year.

The company also took a smaller quarterly loss than analysts had expected. Macy’s built on its 11 per cent jump a day ago and added another 48 cents, or 2.5 per cent, to $19.98. Competitor Kohl’s rose $1.87, or 4.5 per cent, to $43.04. All of those companies have seen their sales and stocks tumble in large part because of increasing online competition.