Wall Street flounders on BOJ fears as Facebook, M&A boosts wane | Reuters

U.S. stocks slid on Thursday afternoon as a midday recovery led by Facebook's earnings coupled with news of promising M&A deals faded and the Bank of Japan's surprising call to cap monetary stimulus continued to rattle investors. The benchmark S&P 500 .SPX lost 21.02 points, or 1 percent, to 2,074.13, the Dow Jones industrial average .DJI was down 224.15 points, or 1.24 percent, to 17,817.4, and the Nasdaq Composite .IXIC dropped 57.04 points, or 1.17 percent, to 4,806.11.

Reuters April 29, 2016 01:30:12 IST
Wall Street flounders on BOJ fears as Facebook, M&A boosts wane 
| Reuters

Wall Street flounders on BOJ fears as Facebook MA boosts wane 
 Reuters

U.S. stocks slid on Thursday afternoon as a midday recovery led by Facebook's earnings coupled with news of promising M&A deals faded and the Bank of Japan's surprising call to cap monetary stimulus continued to rattle investors.

The benchmark S&P 500 .SPX lost 21.02 points, or 1 percent, to 2,074.13, the Dow Jones industrial average .DJI was down 224.15 points, or 1.24 percent, to 17,817.4, and the Nasdaq Composite .IXIC dropped 57.04 points, or 1.17 percent, to 4,806.11.

All 10 major S&P 500 sectors were lower, with information technology's .SPCOMT 1.6 percent fall leading the decliners.

"This really personifies how important central bank policy is on the market," said Jack Ablin, chief investment officer at BMO Private Bank.

Stocks had dipped 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.

The decision came a day after the Federal Reserve decided to hold steady on rates and eased fears that it would signal a rise in June.

Stocks began a modest recovery midday 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) soared 26.3 percent to $78.22 after Abbott Laboratories (ABT.N) said it agreed to buy the medical device maker for $25 billion. Abbott was down 7 percent at $40.70.

DreamWorks Animation (DWA.O) was up 24.2 percent at $39.98, after Comcast (CMCSA.O) said it will buy the company for $3.8 billion. Comcast was up 0.8 percent at $61.86.

But the stocks quickly began to sink again, with Apple leading the way.

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)

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]

Data showed U.S. economic growth braked sharply to its slowest pace in two years as consumer spending softened. Gross domestic product rose 0.5 percent, below the 0.7 percent increase expected by economists polled by Reuters.

Declining issues outnumbered advancing ones on the NYSE by 1,922 to 1,012, for a 1.90-to-1 ratio on the downside; on the Nasdaq, 1,788 issues fell and 1,007 advanced for a 1.78-to-1 ratio favoring decliners.

The S&P 500 posted 19 new 52-week highs and 1 new lows; the Nasdaq recorded 57 new highs and 13 new lows.

(Additional reporting by Tanya Agrawal; Editing by Meredith Mazzilli)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

also read

Zoom forecasts upbeat revenue on remote work, e-learning boost
Business

Zoom forecasts upbeat revenue on remote work, e-learning boost

(Reuters) - Zoom Video Communications Inc on Tuesday forecast better-than-expected revenue for the current quarter, after beating quarterly estimates, as the video-conferencing platform expects steady growth from remote work and online learning. Zoom became a household name during the pandemic as businesses and schools switched to its video conferencing platform for virtual classes, office meetings and social catch-ups

EU reaches deal on tax transparency for multinational firms
Business

EU reaches deal on tax transparency for multinational firms

By Jan Strupczewski BRUSSELS (Reuters) - European Union government and parliament negotiators reached a deal on Tuesday on rules that will force large multinational companies to disclose how much revenue and tax they pay in the 27-nation bloc and how much in countries considered tax havens by the EU. The new law, proposed by the European Commission in 2016, is part of the EU's efforts to fight tax avoidance by large international companies at a time when the EU badly needs cash to finance an economic recovery after the COVID-19 pandemic. Under the new law, multinational corporations with a turnover of more than 750 million euros ($916 million) annually in two consecutive years will have to declare profits, tax and number of employees in EU countries and in countries on the EU list of non-cooperative jurisdictions

OPEC+ sticks to plan to ease supply cuts through July
Business

OPEC+ sticks to plan to ease supply cuts through July

By Alex Lawler and Ahmad Ghaddar LONDON (Reuters) -OPEC+ oil producers agreed on Tuesday to stick to the existing pace of gradually easing supply curbs through July, as they sought to balance expectations of a recovery in demand against a possible increase in Iranian supply. The Organization of the Petroleum Exporting Countries and allies - known collectively as OPEC+ - decided in April to return 2.1 million barrels per day (bpd) of supply to the market during May through July as it anticipated demand would rise despite high numbers of coronavirus cases in India. Since that decision, oil prices have extended their rally and have now gained more than 30% this year, although the prospect of more crude from Iran, as talks on reviving its nuclear deal make progress, has limited the upside