US stocks drop on Cyprus, weak earnings

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In this March 19. 2013, photo, specialist Joseph Dreyer, left, works with traders on the floor of the New York Stock Exchange. World stock markets stalled Thursday March 21, 2013 as uncertainty mounted over whether Cyprus can stave off bankruptcy after the country’s government rejected a plan to contribute to a bailout by seizing money from people’s bank accounts. AP PHOTO/RICHARD DREW

NEW YORK—US stocks fell Thursday, hit by uncertainty over the Cyprus banking crisis and some surprisingly weak corporate earnings.

 

The Dow Jones Industrial Average lost 90.24 points (0.62 percent) to 14,421.49.

 

The broad-based S&P 500 dropped 12.91 (0.83 percent) to 1,545.80, while the tech-rich Nasdaq Composite Index gave up 31.59 (0.97 percent) to 3,222.60.

 

The retreat came after the European Central Bank said it would halt emergency funding to Cyprus’ banks unless the country reaches a bailout deal by Monday. The Cyprus crisis has revived concerns about eurozone stability.

 

Markets were also troubled by a weak earnings report from technology company Oracle. That came a day after FedEx disappointed investors, announcing that its quarterly earnings were hit by poor international results.

 

“The market caved in over corporate news and Cyprus,” said Peter Cardillo of Rockwell Global Capital.

 

Most of the blue-chip members of the Dow ended the day in the red. Trading was hard on banks like Bank of America and JP Morgan, both losing 1.6 percent.

 

The Dow’s technology companies also lost on the day. Cisco gave up 3.8 percent, IBM retreated 1.3 percent and Hewlett-Packard dropped 2.6 percent.

 

Oracle shares sank 9.7 percent after its earnings missed analyst expectations. The results showed weak sales of software licenses and cloud computing subscriptions.

 

Global package delivery giant FedEx dropped 2.7 percent, one day after slashing its profit guidance for fiscal 2013.

 

Lululemon Athletica, which markets sports clothing for women, rose 1.3 percent after it beat fiscal fourth-quarter earnings forecasts. The Canadian company estimated that it lost $12-$17 million in revenue in the current quarter due to a recall of too-sheer yoga pants.

 

Homebuilder KB Home rose 2.5 percent after reporting a big jump in revenues thanks to an increase in the number of homes delivered and a higher average selling price.

 

Bond prices declined. The yield on the 10-year Treasury rose to 2.0 percent from 1.94 percent late Wednesday, while the 30-year jumped to 3.23 percent from 3.17 percent. Bond prices move inversely to yields.

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