Shares of retailers and other consumer companies rose, but not by as much as the broad market, after a report from the largest supermarket chain in the U.S. stoked fears about online competition.
Kroger shares fell sharply after the grocer's investment in online operations to compete with Walmart, Amazon.com and other retailers cut into profit and disappointed investors looking for higher share buybacks and dividends. Walmart opened a new front in the war between conventional and online retailers with major investments in online operations last year, responding, in part, to Amazon's own investment in bricks-and-mortar retails. Kroger's earnings hit highlights a major risk on both sides of the battle -- that the investments will prove to be expensive follies rather than adjustments to new consumer behavior. New weekly jobless claims rose more than economists had anticipated, but remained close to multidecade lows.
-Rob Curran, [email protected]