U.S. stocks closed down on Thursday as the Bank of Japan's shocking call to cap monetary stimulus continued to rattle investors while a late day decline in Apple shares on remarks by billionaire investor Carl Icahn added to selling pressure.
The benchmark S&P 500 .SPX had its worst day in three weeks, losing 19.26 points, or 0.92 percent, to 2,075.89, the Dow Jones industrial average .DJI fell 208.81 points, or 1.16 percent, to 17,832.74 and the Nasdaq Composite .IXIC dropped 57.85 points, or 1.19 percent, to 4,805.29.
Nine of the major S&P 500 sectors were lower, with information technology's .SPCOMT 1.4 percent fall leading the decliners. Consumer staples .SPCOMS rose 0.03 percent.
"This really personifies how important central bank policy is on the market," said Jack Ablin, chief investment officer at BMO Private Bank.
Stocks fell early in the day on the BOJ's decision to hold steady in the face of soft global demand and a rise in the yen, jarring markets particularly after media reports that the central bank would likely go deeper into negative interest rates.
Wall Street dipped further late in the day, led by a decline in Apple stock.
Shares of Apple, already suffering from disappointing earnings, took another hit after billionaire investor Carl Icahn said he no longer has a position. Apple was last down 3 percent at $94.87. (AAPL.O)
Icahn, in an interview with cable television network CNBC, also said he was "still very cautious" on the U.S. stock market and there would be a "day of reckoning" unless there was some sort of fiscal stimulus.
The comments appeared to reverse a modest midday stock market recovery on Facebook's stellar earnings, which pushed the company's stock to record high levels, and a flurry of dealmaking news.
St. Jude Medical (STJ.N) jumped 25.5 percent to $77.79 after Abbott Laboratories (ABT.N) said it agreed to buy the medical device maker for $25 billion. Abbott fell 7.7 percent at $40.42.
DreamWorks Animation (DWA.O) rose 24 percent at $39.95, after Comcast (CMCSA.O) said it will buy the company for $3.8 billion. Comcast closed down 0.2 percent at $61.86.
The U.S. stock market is on its second-longest bull run ever. The S&P 500, which is nearing its record high, has rallied 15 percent since February, helped by a recovery in oil prices and an accommodating Fed.
The U.S. dollar index .DXY has fallen about 4.7 percent since the start of the year against a basket of major currencies, while oil prices have jumped 75 percent in three months. [O/R]
Declining issues outnumbered advancing ones on the NYSE by 1,942 to 1,036, for a 1.87-to-1 ratio on the downside; on the Nasdaq, 1,867 issues fell and 955 advanced for a 1.95-to-1 ratio favouring decliners.
The S&P 500 posted 19 new 52-week highs and 1 new lows; the Nasdaq recorded 63 new highs and 16 new lows.
About 8.1 billion shares changed hands in U.S. exchanges, compared with a 6.9 billion daily average over the past 20 sessions.
(Additional reporting by Tanya Agrawal; Editing by Meredith Mazzilli)
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