Amazon (AMZN) Slumps Amid Market Selloff and Competition From Google (GOOG)

Shares of Amazon (AMZN) ended the day at $129.83. That's a $7.66 price drop and a loss of 5.6%. Amazon is the largest online retailer in the US and a bellweather of economic activity. The drop in shares may have been attributable to an overall market drop and Google's announcement that the search giant will start selling ebooks. If a market pullback persists for some time shares of Amazon are likely to suffer a steep drop. High P/E growth stocks typically perform the worst during market declines. Companies that trade with premium valuations like Amazon and Netflix are sold off as investors flock to the safety of large cap stocks with lower price to earnings ratios. Investors should keep a close eye on this week's action to see if shares of Amazon are in for more pain.