Benchmarks were battered after the central bank of Japan made no additional changes to their previous monetary measures. Investors had expected Japan’s Central Bank to introduce additional measures to ensure stability in the bond market. Fears of the Federal Reserve curbing the bond purchase program also added to investor woes. Meanwhile, the European Commission suggested a series of “recommendations” to revive Europe’s sick steel industry. Machinery orders in Japan fell for the first time in the past three months owing to low “capital spending”. All the top ten S&P 500 industry groups suffered losses among which financial stocks suffered the most.

The Dow Jones Industrial Average (:DJI) lost 0.8% to close the day at 15,122.02. The S&P 500 decreased 1.0% to finish yesterday’s trading session at 1,626.13. The tech-laden Nasdaq Composite Index declined 1.1% to end at 3,436.95. The fear-gauge CBOE Volatility Index (:VIX) increased 10.6% to settle at 17.07. Consolidated volumes on the New York Stock Exchange, American Stock Exchange and Nasdaq were roughly 6.38 billion shares, marginally above 2013’s average of 6.36 billion shares. Declining stocks outnumbered the advancers. For the 15% that advanced, 83% declined.

In the beginning of 2013, Japan had introduced a stimulus program of $1.4 trillion because of which Japan was in a position to achieve growth in the first quarter. In light of recent volatile trading in the bond markets, investors expected Bank of Japan to introduce few additional measures to control the situation. However, no such measures were announced. The Governor of Bank of Japan, Haruhiko Kuroda, said precautionary steps will be taken in the future if bond yields “spiked”.

Japanese Prime Minister, Shinzō Abe, said the government plans to implement tax deductions during autumn in an attempt to encourage capital spending. He added that he would layout the blue print for a growth strategy after July 21. These developments dampened investor sentiment, triggering a sell-off and a free-fall in the stock markets.

Adding to investor woes, fears of the Fed tapering the bond purchase program dampened investor sentiment. The bond purchase program has been the very foundation due to which major indices have touched record highs. However, since Bernanke has made uncertain statements on slowing of the program, benchmarks have been on a bumpy road.

On the domestic front, according to the U.S. Department of Commerce, total inventories, apart from manufacturers’ sales branches and offices for April inched up 0.2% in line with consensus estimates. Among the categories, inventories for motor vehicle and motor vehicle parts increased 1.9%. Inventories for metals and minerals, apart from petroleum declined 1.1%. Inventories of beer, wine, and distilled alcoholic beverages increased 2.3%.