The U.S. stock market opened higher on Monday morning, after
EU policymakers reached a bailout deal for Cyprus, which has been
beset by a banking crisis.
The optimism didn't last, however, as investors took the news
as an opportunity to take profits. Under the terms of the deal,
bondholders and depositors were forced to take losses and Dutch
Finance Minister Jeroen Dijsselbloem said that the Cypriot
bailout could become a template for other EU rescues in the
"The critical issue remains that of precedent for larger
Eurozone countries, and the way in which the Cyprus situation has
been managed does not seem to inspire a great deal of
confidence," said Ilya Spivak, a currency strategist at DailyFX
in New York.
The Dow Jones Industrial Average fell 64 points, or 0.44
percent, to 14,448.
The S&P 500 lost around 5 points, or 0.33 percent, to
The Nasdaq Composite shed almost 10 points, or 0.30 percent,
Ben Bernanke Defends Fed Monetary Policy
Fed Chairman Ben Bernanke defended the central bank's
aggressive monetary easing policies in prepared remarks to a
group of academics in London and dismissed rhetoric about
currency wars. "Because stronger growth in each economy confers
beneficial spillovers to trading partners, these policies are not
'beggar-thy-neighbor' but rather are positive-sum,
'enrich-thy-neighbor' actions," he said.
The Fed chief has been grilled by Congress repeatedly about
the potential consequences of the central bank's zero interest
rate policy and massive asset purchases, all designed to lift
unemployment and spur growth in the economy. Other central banks
around the world have engaged in similar programs, and some
observers are worried about competitive currency devaluations
around the globe.
Crude oil rose on Monday to start the week. Near the close of
equity trading, NYMEX crude futures were up 0.89 percent to
$94.54. Brent crude futures advanced 0.24 percent to $107.92.
Precious metals were mixed on the day with gold falling
slightly while silver rose. At last check, COMEX gold futures
were down around 0.15 percent to $1,605.60. Silver had risen 0.41
percent to $28.82. Copper fell 0.61 percent on the session.
In the agricultural complex, corn rose around 1 percent while
wheat was last trading down 0.34 percent. Movers in soft
commodities included sugar and cocoa, both of which lost more
than 1 percent on the day.
Near the close of equity trading, the iShares Barclays 20+
Year Treasury Bond ETF (NYSE:
) was down around 0.02 percent to $117.30. Yields were slightly
lower on the day across the board.
The 2-Year Note and 5-Year Note yields lost one basis point to
0.25 percent and 0.78 percent, respectively. The 10-Year Note and
30-Year bond yields also fell one basis point to 1.91 percent and
The U.S. dollar was strongly higher on Monday as investors
showed some risk aversion. Near the close of equity trading, the
PowerShares DB US Dollar Index Bullish ETF (NYSE:
), which tracks the performance of the greenback versus a basket
of foreign currencies, had risen 0.62 percent to $22.57.
The closely watched EUR/USD fell sharply after a bailout deal
with Cyprus was reached on Sunday. At last check, the EUR/USD was
down 0.92 percent to $1.2863. The only other significant mover
was the USD/JPY, which fell 0.44 percent.
Volume and Volatility
Despite the moderate loss in the stock market, the VIX only
finished up 2 percent to 13.84, suggesting investor concern
continues to remain low.
Volume was slightly below average even as market players
reacted to the bailout in Cyprus. Around 123 million SPDR S&P
500 ETF (NYSE:
) shares traded hands versus a 3-month daily average of 127.5
Shares of private education provider Apollo Group (NASDAQ:
) were up around 7 percent heading into the closing bell after
the company's fiscal second-quarter earnings results.
Vanguard Health Systems (NYSE:
) lost more than 6 percent on Monday after the company was
notified by the state of Arizona that it was not going to be
awarded a Medicaid-care contract this year.
Veeco Instruments (NASDAQ:
) jumped better than 8 percent on Monday as investors prepared
for the company's quarterly earnings results after the closing
Horizon Pharma (NASDAQ:
) climbed better than 14 percent on the day. The reason for the
advance in the small-cap stock was not readily apparent.
Enphase Energy (NASDAQ:
) surged better than 8 percent on the day on no significant news.
The stock has been rallying sharply in recent months.
) shares fell almost 5 percent on the trading session ahead of
the company's quarterly earnings report on March 28.
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