US stocks sink amid central bank anxiety

Trader Michael Hagis works on the floor of the New York Stock Exchange Tuesday, June 11, 2013. US stocks ended the day solidly lower Tuesday after the Bank of Japan’s status-quo policy decision revived concerns about the winding down of central bank stimulus measures. AP PHOTO/RICHARD DREW

NEW YORK—US stocks ended the day solidly lower Tuesday after the Bank of Japan’s status-quo policy decision revived concerns about the winding down of central bank stimulus measures.

The Dow Jones Industrial Average fell 116.57 (0.76 percent) to 15,122.02.

The broad-based S&P 500 dropped 16.68 (1.02 percent) to 1,626.13, while the tech-rich Nasdaq Composite Index sank 36.82 (1.06 percent) to 3,436.95.

The losses came after the Bank of Japan opted to maintain its aggressive asset-purchase program unchanged, saying the world’s third-largest economy was “picking up.”

“The expectation was that Japan would keep increasing it,” said Andrew Fitzpatrick of Hinsdale Associates. “There was a sort of a built-in belief that there was going to be more there.”

The restraint in Japan also raised questions about the US Federal Reserve’s future direction of policy measures ahead of next week’s Federal Open Market Committee meeting.

The Fed has signaled it wants to begin to craft a plan for tapering its $85 billion a month bond-purchase program.

“The threat of the easy money being taken away is enough to scare investors,” said David Levy, Kenjol Capital Management.

Banking stocks recorded outsized losses, including Morgan Stanley (down 3.9 percent) Goldman Sachs (down 2.5 percent) and Wells Fargo (down 1.5 percent).

Other large declines came from General Motors (down 2.3 percent) and American International Group (down 2.2 percent).

Sprint Nextel rose 2.4 percent after SoftBank raised its bid in the hotly contested acquisition battle for the US telecom. Rival bidder Dish Network was up 0.8 percent.

Google shed 1.2 percent after announcing the acquisition of Israeli traffic and mapping application Waze for an undisclosed sum. Several media reports put the price at more than $1 billion.

News Corp. slipped 0.9 percent after shareholders approved a measure to divide the company in two. The company said it is on track to complete the split June 28.

Yoga attire manufacturer Lululemon Athletica plummeted 17.5 percent after announcing that chief executive Christine Day will step down once a new chief is identified.

Bond prices rose. The yield on the 10-year US Treasury slipped to 2.20 percent from 2.22 percent late Monday, while the 30-year dropped to 3.33 percent from 3.37 percent. Bond prices move inversely to yields.