Stocks hit after BofJ doesn't boost stimulus, GDP slows, Icahn sells Apple
U.S. stocks turned sharply lower Thursday after investors were disappointed by both the Bank of Japan's decision not to take further steps to jump-start its ailing economy and a weaker-than-expected reading on first-quarter economic growth in the U.S.
The selling intensified in the afternoon following news investor Carl Icahn had sold his entire stake in Apple.
The Dow Jones industrial average was off 211 points, or 1.2%, to 17,831 for its biggest drop since Feb. 11. The broader Standard & Poor's 500 stock index was off 0.9%, while the Nasdaq composite fell 1.2%.
Wall Street was expecting the BoJ to announce additional stimulus measures, such as pushing deposit rates down further into negative territory and boosting the amount of assets it would purchase each year to stimulate growth and stoke inflation. Instead, the BoJ opted to stand pat and wait to see the results of the stimulus measures rolled out in January.
The BoJ kept its deposit rate at 0.1% and its purchases of Japanese government bonds at 80 trillion yen per year.
Wall Street was also reacting to weak growth in the first three months of the year. U.S. first-quarter GDP grew at 0.5%, below estimates and softer than the 1.4% reading in the final quarter of last year.
Economy grew feeble 0.5% in the first quarter
Stocks in Japan got slammed on the news, witrh the Nikkei 225 closing down 3.6%. The BoJ's decision not to deliver more stimulus, pushed the Japanese yen up nearly 4% vs. the dollar. A stronger yen makes Japanese products more expensive abroad, which made shares of Japanese exporters less attractive.
The BoJ's inaction comes a day after the U.S. Federal also kept interest rate policy unchanged, leaving short-rates pegged at 0.4%.
Shares of Apple fell 3.1% to $94.81 after Icahn, a long-time fan of the gadget maker, revealed that he had sold his entire stake. That in turn weighed on the broader market.