12:15 PM New York – U.S. stocks struggled to advance and a broad selloff in sectors dragged market sentiment. Investors turned cautious on stretched valuation. The International Monetary Fund trimmed its world growth projection for the current year from its earlier projection in January.
Investors on Wall Street took wait-and-see approach after tech stock selloff broadened to the fourth day. Market indexes opened weak.
Investors worried of stretched valuation, especially in the tech sector, and ahead of earnings season launch this week, and increasingly stayed on the sidelines.
S&P 500 index declined 6.00 or 0.32% to 1,839.07 and the Nasdaq Composite Index fell 9.32 or 0.2% to 4,070.20.
IMF Upgrades Global Growth Outlook
The International Monetary Fund trimmed its world growth projection for the current year from its earlier projection in January.
The announcement was done ahead of the meeting of the World Bank and the IMF later this week in Washington.
The controversial bank, traditionally headed by a European leader, said higher sales tax in Japan and slowing growth in emerging markets.
The IMF estimated the world economic growth at 3.6% from its earlier projection of 3.7% in January and higher from 3% in 2013.
The IMF estimated euro zone economic growth revised higher to 1.2% from 1.1% and the U.S. outlook was increased to 2.8% in the current year from 1.9% in 2013.
Japan growth estimate was lowered to 1.4% from 1.7% in January and China’s growth is estimated to slow to 7.5% from 7.7% in 2013. Russia’s growth estimate was trimmed to 1.3% from 1.9% after sanctions from the U.S. and Europe.
India’s economy is expected to accelerate and grow at 5.4% from 4.4% in 2013.
The Bank of Japan left its key rate unchanged and left its bond buying program intact and offered no new measures to stimulate the economy.
In its first meeting after the sales tax increase this month, the central bank noted that the economic expansion is continuing at a moderate pace.
The yen strengthened to a five-day high after the current account swung to a surplus for the first time in five months.
However, market indexes declined in Tokyo for the third day in a row, following weak closes in New York and in Europe.
The Nikkei 225 Stock Average dropped 201.97 or 1.4% to 14,606.88 and the Topix index declined 22.28 or 1.9% to 1,174.56.
The yen increased to 102.83 against the U.S. dollar, its best level in five days of trading.
Takeda Pharmaceutical Co. Ltd
declined 5.2% to 4,572 yen after the U.S. jury ordered to pay $6 billion as the company lost the federal court trial for the claims as the company hid the cancer risks of its Actos diabetes medicine.