US stocks fall on Cyprus bailout worries
Traders work on the floor of the New York Stock Exchange Friday, March 15, 2013. US stocks fell for a second straight day Monday, March 18, 2013, as the Cyprus banking crisis sent jitters through markets. AP PHOTO/RICHARD DREW
NEW YORK—US stocks fell for a second straight day Monday as the Cyprus banking crisis sent jitters through markets.
The huge tax on bank depositors included in the weekend EU-IMF bailout plan for Cyprus sent stocks sinking from the opening bell as outrage spread across the Mediterranean island country and spurred fears of similar penalties elsewhere in the eurozone.
The Dow Jones Industrial Average finished down 62.05 points (0.43 percent) at 14,452.06.
The broad-based S&P 500 dropped 8.60 (0.55 percent) to 1,552.10, while the tech-rich Nasdaq Composite lost 11.48 (0.35 percent) to 3,237.59.
The Cyprus controversy hit a market already on edge for a correction after the strong record-bursting run-up since the beginning of March, and also cautious ahead of the two-day Federal Reserve policy board meeting that begins Tuesday.
“It scares investors in Cyprus, it scares investors in Europe and Asia, and in the US,” said High Johnson of Hugh Johnson Advisors.
“We learned from past financial crises, for instance the Southeast Asia financial crisis that started in a small country like Thailand back in the ’90s, that a crisis starting in a small country like Cyprus can spread all over.”
Apple added another 2.7 percent amid continuing speculation that it could release some of its massive financial war chest back to investors in the form of a dividend or share buyback.
Constellation Brands gained 3.0 percent amid signs from the Justice Department that a deal could be nigh to approve the proposed Anheuser-Busch Inbev-Grupo Modelo merger, blocked for the moment by a federal antitrust suit.
Constellation stands to benefit by picking up distribution units from Modelo in the deal.
AB Inbev was up 0.2 percent.
The Netherlands’s NXP Semiconductor fell 4.8 percent amid reports it had lost a contract to supply chips for the new Galaxy S4 smartphone.
Cable operator Charter Communications shot up 8.7 percent following reports that Liberty Media would buy a stake in the company.
Bond prices rose. The yield on the 10-year Treasury fell to 1.96 percent from 2 percent late Friday, while the 30-year yield fell to 3.18 percent from 3.23 percent late Friday. Bond prices and yields move inversely.
