Amazon's deal with Sears Holdings is weighing on home improvement stocks
The Dow Jones Industrial Average (DJIA) traded in positive territory at the open, but has since moved lower after Amazon claimed Home Depot as its latest victim. The e-tailer inked a deal with Sears Holdings to sell its Kenmore brand, sending the Dow stock spiraling. Negative earnings reactions for American Express and Travelers and a Bloomberg News report that special counsel Robert Mueller is widening his Russia probe to include President Donald Trump's business dealings are only adding to the risk-off backdrop. The S&P 500 Index (SPX) and Nasdaq Composite (COMP) are also struggling to gain ground, though both indexes hit record highs earlier today.
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- Plus, Microsoft options traders active ahead of earnings; a soaring energy stock; and Lowe's feels the Amazon effect.
Among the stocks with unusual options volume is Microsoft Corporation (NASDAQ:MSFT), with roughly 132,000 contracts traded -- three times the expected intraday pace. Ahead of tonight's earnings report, August options are popular, with a block of more than 19,000 August 80 calls traded not long ago. Elsewhere, longer-term traders are purchasing new positions at the September 2018 75-strike call. After hitting a record high of $74.24 earlier, MSFT stock was last seen down 0.3% at $73.62.
Kinder Morgan Inc (NYSE:KMI) is the biggest percentage gainer on the SPX at midday, as news the energy infrastructure company is on schedule with its Trans Mountain pipeline expansion overshadows a second-quarter earnings miss. KMI stock is up 5.8% at $20.82. The shares are back in positive year-to-date territory, but are struggling near their 200-day moving average -- a trendline that served as support in March.
The new partnership between Amazon and Sears is weighing on home improvement retailer Lowe's Companies, Inc. (NYSE:LOW), too. LOW stock is one of the worst stocks on the SPX today, down 6.1% at $72.15 to trade near levels not seen since early February.