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Saturday 17 June 2017 BUSINESS
A24

Amazon-Whole Foods deal slams grocery stores; Dow ticks up Housing starts

By MARLEY JAY firm Global Data Retail, industrial average added already runs AmazonFresh, drop for third
AP Markets Writer said Amazon is likely to 24.38 points, or 0.1 per- a grocery delivery service straight month
NEW YORK (AP) — Ama- push supermarkets and cent, to a record high of that costs $14.99 a month
zon’s $13.4 billion deal for grocery stores to slash 21,384.28. The Nasdaq for members of its Prime
Whole Foods sent grocery prices, which will affect the composite fell 13.74 points, service, and it recently By JOSH BOAK
stores, big retailers, and companies that make and or 0.2 percent, to 6,151.76. opened a few grocery AP Economics Writer
food makers and distribu- distribute those products. The Russell 2000 index of stores. Investors dumped WASHINGTON (AP) —
retailers, drugstores, and Homebuilders slowed
even discount chains. down the pace of con-
Many of them have started struction for the third
trying to sell more groceries straight month in May, a
in the last few years to try possible sign that the short-
to capitalize on shoppers’ age of houses for sale
yen for fresher, more natu- might worsen.
ral food. That was a trend The Commerce Depart-
Whole Foods helped start. ment said Friday that hous-
Wal-Mart had its worst day ing starts fell 5.5 percent in
in more than a year as it May to a seasonally adjust-
fell $3.67, or 4.7 percent, to ed annual rate of 1.09 mil-
$75.24. Costco took its big- lion units. This comes after
gest loss in almost six years a 2.7 percent monthly de-
as it sank $12.95, or 7.2 per- cline in April and a 7.7 per-
cent, to $167.11. Target cent drop in March. Home
tumbled $2.85, or 5.1 per- construction is still 3.2 per-
cent, to $52.61. cent higher year-to-date,
Amazon is a unique threat but that increase has been
to many retailers because too modest to address the
it doesn’t mind losing mon- dwindling supply of homes.
ey for long stretches. The Homebuilders remain op-
company might be able to timistic about their sales
Trader Joseph Lawler works on the floor of the New York Stock Exchange, Friday, June 16, 2017. sell inexpensive groceries prospects, but the level
Amazon’s $13.4 billion deal for Whole Foods sent grocery stores, big retailers, and food makers as it makes its money from
and distributors plunging Friday. of construction has done
(AP Photo/Richard Drew) its cloud computing busi- little to meet demand from
ness and its gigantic online would-be buyers. The num-
tors plunging Friday. En- “As Amazon enters the smaller company stocks marketplace.“Is the future ber of existing homes listed
ergy companies rose while grocery market proper, shed 3.36 points, or 0.2 per- of grocery store shopping for sale has been register-
other stocks were little it will put a lot more pres- cent, to 1,406.73. going to be a point and ing annual declines for
changed. sure on existing grocers,” Online juggernaut Amazon click experience, or is it roughly two years — creat-
It’s rare for a single deal to he said. “Those grocers will said it pay $42 a share for going to be going to a ing a dearth of properties
have a big effect on the respond by cutting prices Whole Foods. Whole Foods grocery store?” said Dan on the market.
broader stock market, but and that will cut profits for had been the target of Morgan, senior portfolio “The lack of inventory of
Amazon’s agreement to the distributors.” sale rumors for about two manager at Synovus Trust. homes for sale is one of the
buy Whole Foods Market Elsewhere, energy com- months, and investors ap- Supermarkets and grocery most pressing challenges
did. Investors wondered if panies rose as oil futures peared to wonder Friday stores had also plunged in the housing market to-
Amazon will do to grocery bounced back from their if another bidder may step Thursday after Kroger cut day,” said Mark Fleming,
stores and supermarkets lowest price this year and in. Its stock jumped $9.62, its annual forecast. Kroger, chief economist at First
what it’s done to sellers of utilities and industrial and or 29.1 percent, to a two- which plunged 19 per- American Financial, a title
goods like clothing and of- basic materials ground out year high of $42.68. Ama- cent a day ago, lost an- insurance company.
fice supplies: force them to modest gains. zon climbed $23.54, or 2.4 other $2.27, or 9.2 percent, The monthly declines in
make big changes or be Thanks to a late gain, the percent, to $987.71. and hit a three-year low housing starts come de-
supplanted. Standard & Poor’s 500 in- Many investors had ex- of $22.29. Sprouts Farmers spite a solid job market
Neil Saunders, managing dex inched up 0.69 points pected Amazon to get Market skidded $1.41, or with a relatively healthy
director of the research to 2,433.15. The Dow Jones into the grocery business. It 6.3 percent, to $21.01. q unemployment rate of 4.3
Genesis HealthCare to pay $53M to settle probes percent. Many analysts
expect the job gains to
translate into more home
By MICHAEL BALSAMO violated federal statutes pice services for patients at The settlement also re- construction. What has
Associated Press by submitting false claims a Las Vegas, Nevada fa- solved allegations that generally happened is a
decline in the construction
LOS ANGELES (AP) — Gene- to Medicare and Medic- cility, even though the pa- some services provided by of apartment buildings that
sis HealthCare has agreed aid for medically unnec- tients were not terminally ill, nursing homes owned by has been more than offset
to pay $53.6 million to set- essary therapy, hospice prosecutors said. Genesis were “grossly sub- by the gains in the building
tle allegations that it sub- service and substandard Subsidiaries of Genesis standard and/or worthless of single-family houses.
mitted false claims to the nursing care.The compa- HealthCare were also ac- and therefore ineligible for Groundbreakings in
federal government for ny, headquartered in Ken- cused of submitting false payment.”Jeanne Moore, the Northeast were un-
unnecessary therapy and nett Square, Pennsylvania, Medicare and Medicaid a spokeswoman for Gen- changed in May and de-
substandard nursing care, owns and operates nursing claims, providing therapy esis HealthCare, confirmed clined in the Midwest and
the Justice Department facilities, senior living facili- to patients longer than the settlement in a state- South. Housing starts rose
said Friday.The settlement ties and rehabilitation cen- medically necessary and ment and said the compa- slightly in the West.Build-
resolves six federal lawsuits ters in several states. billing for more therapy ny “operates in a in a heav- ing permits, an indicator
and investigations alleg- The company was alleged time than patients actu- ily regulated industry and is of upcoming construction,
ing Genesis HealthCare to have submitted false ally received, according to pleased to resolve these tumbled 4.9 percent na-
companies and facilities claims to Medicare for hos- prosecutors. legacy matters.” q tionwide to 1.17 million.q