Wall Street Stocks Fall on Cyprus Bailout
Stocks fell in early trading on Wall Street on concern that the terms of a proposed bank bailout for the Mediterranean island nation of Cyprus could cause the euro crisis to flare up again.
The Dow Jones industrial average was down 36 points, or 0.2 percent, to 14,477 as of 10:18 a.m. EDT.
The Dow fell as much as 110 points in the early going, then recouped some of its loss.
The Standard & Poor’s 500 index was down eight points, or 0.5 percent, to 1,552.
The Nasdaq composite fell 17 points, or 0.5 percent, to 3,232.
Bank Deposit Tax Spurs Fear of Bank Runs
Cyprus is proposing a hefty levy on bank deposits as a condition for a national bailout. The proposal roiled international markets. The measures are stoking fears of bank runs in the other 16 nations that use the euro.
Despite a strong rally in stocks since the start of the year, concerns persist about the euro-region’s lingering debt crisis. The Dow fell 1.6 percent Feb. 25, its biggest wobble this year, after elections in Italy threw the country into political paralysis, endangering crucial economic reforms.
Markets in Europe and Asia also fell. The dollar rose a penny against the euro, a relatively big move, to $1.29. Gold rose $16 to $1,608 an ounce. The yield on the 10-year Treasury bond, which moves inversely to its price, dropped to 1.95 percent from 1.99 percent.
The Dow is still up 10.3 percent since the start of the year and surpassed its previous record high close on March 5. It closed lower on Friday, breaking a 10-day winning streak, its longest in 17 years.
Stocks have gained this year on evidence that the housing market is recovering and signs that hiring is picking up. The rally has also been helped by continuing stimulus from the Federal Reserve and strong company earnings.
Goldman Sachs said Monday that it had lifted its end-of-year target for the S&P 500 to 1,625 from its previous target of 1,575. The investment bank is forecasting that the U.S. economy will grow 2 percent this year and 2.9 percent next year. It also predicts that corporate deals and dividend payments will increase.
Copyright 2013 The Associated Press.