BackWall Street slides as BOJ move rattles trading
Investors disappointed as BOJ keeps policy steady; Lululemon tumbles after CEO says to step down
PremiumNew York: US stocks slid in a volatile session on Tuesday after Japan’s central bank disappointed equity markets by holding its monetary policy steady.
Major indexes fell more than 1% after the open but shaved most of the losses by midday, only for the selling to resume towards the session’s end. However, overall volume was average.
Financial and energy shares led the way down on the S&P 500. The 10 major sectors of the index closed the day lower but defensives including consumer staples and healthcare fared better.
The decision by the Bank of Japan roiled various markets as trades built around central bank support of major economies have begun to unwind in the past weeks. Benchmark US Treasury yields briefly approached 2.3%, the highest in 14 months, and equities dropped globally, while the yen posted its strongest day against the US dollar in more than 2 years.
Investors in US markets have become more nervous in recent weeks over when the Federal Reserve may slow its accommodative measures, which have been a pillar of the S&P 500’s gain of 14% so far this year.
“A lot of what has fueled the rally in equity indexes has been a combination of improvement in earnings and the economy, but in the background there was always the idea that easy money was helping elevate asset prices," said Kevin Caron, market strategist at Stifel, Nicolaus & Co in Florham Park, New Jersey.
The S&P 500’s steady climb so far this year has gotten bumpier since comments from Fed chairman Ben Bernanke last month sparked uncertainty over the US central bank’s timeline for slowing its $85 billion a month bond purchases.
Dole Food Co. jumped 22.2% to $12.46 after the company received an unsolicited buyout offer from its chief executive.
US-traded shares of pharmacy benefit manager Catamaran Corp. jumped 11% to $53.99 as at least six brokerages raised their price targets on the Canadian company after it signed a 10-year agreement with health insurer Cigna Corp.
SoftBank Corp. said it agreed with Sprint Nextel Corp. to raise its offer for the US wireless carrier to $21.6 billion from $20.1 billion. Sprint was up 2.4% at $7.35.
Decliners outpaced advancers by 6.6 to 1 on the NYSE and by 2.8 to 1 on the Nasdaq. Reuters
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