Stocks tumble after Japan holds policy

US stocks slid in a volatile session yesterday after Japan’s central bank disappointed equity markets by holding its monetary policy steady.

Major indexes fell more than one per cent 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 per cent, the highest in 14 months, and equities dropped globally, while the yen posted its strongest day against the U.S. dollar in more than two years.

Investors in U.S. 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 per cent so far this year.

The Dow Jones industrial average fell 116.57 points or 0.76 per cent, to 15,122.02, the S&P 500 lost 16.68 points or 1.02 per cent, to 1,626.13 and the Nasdaq Composite dropped 36.82 points or 1.06 per cent, to 3,436.95.

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.