Wall Street opens lower after BOJ rate decision surprise

>

Wall Street opened lower on Thursday after the Bank of Japan stunned markets by holding off from expanding monetary stimulus, showing yet again how vulnerable markets are to central bank decisions.

The BOJ's decision to hold steady in the face of soft global demand and a rise in the yen was particularly jarring for markets after media reports that the central bank wanted to go deeper into negative interest rates.

The BOJ's decision comes a day after the U.S. Federal Reserve decided to hold steady on rates and after fears eased that the Fed would signal a rise in June.

While the labor market continues to gain strength, inflation remains below the central bank's 2 percent target.

"We would not expect the Bank of Japan's decision to have a sustainable, lasting impact on the U.S., but we do think that it is yet another illustration of the power that central banks have upon the markets," said Erik Wytenus, global investment specialist at J.P Morgan Private Bank in Palm Beach, Florida.

"It has been over half a decade now where central banks are really the most important factor in capital markets."

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

Another piece of data showed that the number of Americans filing for unemployment benefits had risen to 257,000 last week from 247,000 the week before, but the underlying trend remained consistent with tightening labor market conditions.

At 9:39 a.m. ET (1329 GMT) the Dow Jones industrial average .DJI was down 89.75 points, or 0.5 percent, at 17,951.8, the S&P 500 .SPX was down 6.38 points, or 0.3 percent, at 2,088.77 and the Nasdaq Composite .IXIC was down 0.53 points, or 0.01 percent, at 4,862.61.

Nine of the 10 major S&P 500 sectors were lower, with the materials index's .SPLRCM 1.08 percent fall leading the decliners.

"On the Nasdaq, 1,537 issues fell and 696 advanced.The S&P 500 index showed 8 new 52-week highs and 1 new low, while the Nasdaq recorded 13 new highs and 9 new lows.(Reporting by Tanya Agrawal; Editing by Don Sebastian)"DuPont (DD.N) and Dow (DOW.N) fell 1.5 percent, weighing the most on the sector.

The tech sector .SPLRCT was the lone gainer, boosted by Facebook (FB.O), which jumped more than 10 percent to open at a record $119.94, a day after the company's revenue rose 50 percent.

With the S&P 500 less than 2 percent away from its record high, traders are struggling to find fresh catalysts to send the index above that mark.

First-quarter corporate earnings are expected to fall 6.9 percent, according to Thomson Reuters I/B/E/S.

Domino's Pizza (DPZ.N) fell 9.2 percent to $121.15 after its results missed estimates.

St. Jude Medical (STJ.N) soared 25.1 percent to $77.47 after Abbott Laboratories (ABT.N) said it agreed to buy the medical device maker for $25 billion. Abbott was down 7.3 percent at $40.66.

Declining issues outnumbered advancing ones on the NYSE by 1,824 to 772. On the Nasdaq, 1,537 issues fell and 696 advanced.

The S&P 500 index showed 8 new 52-week highs and 1 new low, while the Nasdaq recorded 13 new highs and 9 new lows.

(Reporting by Tanya Agrawal; Editing by Don Sebastian)

.