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US: Stocks falter on Icahn remarks as BoJ hold fire
[NEW YORK] Billionaire investor Carl Icahn sent US stocks reeling Thursday after announcing he liquidated his investment in Apple, the biggest factor in the Dow's more than 200-point drop.
Mr Icahn's remarks served as the last jolt in a news-jammed day that included a surprise decision by the Bank of Japan against enacting further monetary stimulus and an unsolicited US$9.3 billion bid by French pharma titan Sanofi to buy US biotech firm Medivation.
Oil prices climbed to fresh 2016 highs, but the US government's first estimate of economic growth in the January-March quarter came in below expectations at an anemic 0.5 per cent.
In Europe, shares were little-changed, with Frankfurt outperforming with a 0.2 per cent gain.
On Wall Street, the Dow Jones Industrial Average and the Nasdaq Composite both closed down 1.2 per cent as Apple's 3.1 per cent loss led a broader selloff in the tech sector.
Mr Icahn told CNBC he unloaded his remaining shares in Apple due to worries the Chinese government would thwart the tech titan's efforts to sell more iPhones and other gadgets in the world's second-biggest economy.
Mr Icahn also said he was "extremely cautious" about US equities given the embrace by the US Federal Reserve and other central banks of low and negative interest rates.
On Thursday, the BoJ's held fire on a fresh round of widely expected stimulus measures, sparking questions about whether it had anything left in its arsenal to kickstart the stuttering Japanese economy.
Tokyo's Nikkei index plunged more than 3.5 per cent, while the yen moved sharply higher against other currencies. Near 1700 GMT, the dollar was at 108.13 yen from 111.47 yen Wednesday.
The move by the Japanese central bank suggests "the BOJ itself may be confused about what the right next step should be," said Briefing.com analyst Patrick O'Hare.
"That's not a good position and it is apt to make life more difficult for other central banks as they contemplate their next moves and how to avoid counter-productive decision making." Traders had widely expected the BoJ to unveil fresh measures to shore up the world's number three economy after this month's deadly earthquakes in southern Japan and a string of weak data.
"It's a total shock," said Nader Naeimi, Sydney-based head of dynamic markets at AMP Capital Investors.
"From currencies to equities to everything - you can see the reaction in the markets. I can't believe this. It's very disappointing." The drag from the BoJ move was partly countered by merger news.
DreamWorks Animation, the studio known for its Shrek and Madagascar films, surged 24.1 per cent as it agreed to be acquired by Comcast for $3.8 billion. Comcast fell 0.2 per cent Medical device maker St. Jude Medical soared 25.6 percent on news it reached a deal to be acquired by Abbott for US$25 billion in cash and shares. Abbott lost 7.8 per cent.
A second big healthcare deal also looked possible as drugmaker Sanofi went public with a an all-cash US$9.3 billion offer for Medivation, saying the US company repeatedly refused to engage in talks.
Medivation climbed 7.9 per cent, while US shares of Sanofi lost 1.8 per cent.