Apple (AAPL) dominated market moves for the second day in a row.
The tech giant wiped out any earlier gains for the tech-heavy Nasdaq after billionaire investor Carl Icahn said he no longer had any stake.
The S&P 500 and Dow Jones Industrial Average, already falling before the Apple news, plumbed new session lows to close out the day. The S&P 500 fell 1%, the Dow slid 1.3%, and the Nasdaq tumbled 1.1%.
Apple declined 2% after Icahn told CNBC he no longer has a position in the tech giant as its growth in China looks uncertain. Icahn previously held just under 1% of Apple's shares outstanding.
"You worry a little bit -- and maybe more than a little -- about China's attitude," Icahn said, noting that its government could impose regulatory restrictions on a whim.
Markets were already under pressure for much of the day as fears over the U.S. economy's softness in the first quarter were confirmed. The economy expanded at a rate of 0.5% in the first quarter after a respectable 1.4% rise in the fourth quarter. Consumer spending rose 1.9%, driven by growth in services, while business investment hit its worst levels since the recession.
The first estimate of GDP growth was expected to come in at a stronger 0.7%. Economists anticipated that factors, including weaker manufacturing, a stronger U.S. dollar, softer global demand and volatile market activity, would eat into U.S. GDP for the start of the year.
Most economists remain optimistic that the slowdown at the year's start is only temporary and that in the remaining months of 2016, there will be a rebound.
"Some of the headwinds the economy faced in late 2015/early 2016 are diminishing (i.e., financial conditions are becoming more accommodative), setting the stage for a reacceleration in economic activity," Kevin Cummins, U.S. economist at UBS Investment Bank, wrote in a note. "In our view, the domestic economy remains on solid footing, perhaps reflecting the lagged benefit of still-low energy prices."
Facebook (FB) dominated earnings news after quarterly revenue growth of 52% trumped expectations. The social network boosted its top line through video and mobile advertising. Adjusted earnings of 77 cents a share compared with expected profit of 62 cents.
"The results, simply, speak for themselves," wrote Jim Cramer and Jack Mohr of Action Alerts PLUS, which owns Facebook. "We fully embrace Facebook's continued outperformance. The ability of this management team to execute on its lofty goals is unmatched and its investments are clearly paying off."
Ford (F) rose 3.7% after beating first-quarter estimates on its top and bottom lines. Quarterly earnings climbed to 68 cents a share from 29 cents a year earlier. Analysts had expected per-share profit of 45 cents. The automaker was profitable in all markets except South America.
Time Warner Cable (TWC) enjoyed a record high in net customer growth and hit an eight-year best in first-quarter sales. The cable company, which is set to be acquired by Charter Communications (CHTR) , posted a 7.2% increase in revenue while profit rose 9%.
In deal news, Comcast's (CMCSA) Universal Pictures made an official bid for DreamWorks Animation (DWA) after days of takeover speculation. The movie studio, part of NBCUniversal, offered $3.8 billion for the producer of popular animated films, including Minions and Shrek.
Abbott Laboratories (ABT) slid 6% after agreeing to buy St. Jude Medical (STJ) in a deal worth $25 billion. Abbott offered a cash-and-stock deal equivalent to $85 a share for the medical device maker. The company expects an increase in adjusted earnings in the first full year after the deal closes. St. Jude shares rose 25.9%.
Japan's central bank opted to leave rates as is after initiating a negative-rate policy in February. Its asset purchase target remained at 80 trillion yen for the year, while its deposit rate was held at minus 0.1%. Bank of Japan Gov. Haruhiko Kuroda said the central bank needed more time to evaluate the effects of the change in policy.
"At this meeting, we judged that it was suitable to look more closely at the extent to which the effects of our policies are sinking in," Kuroda said.
The inaction surprised investors, most of whom had expected further stimulus from the Bank of Japan. Conditions in the world's third-largest economy have weakened since its central bank last met in March.