U.S. Markets Hit Dry Air Pocket, Reverse Into Red on Euro Weakness
It looked like it was going to be business as usual for bulls in the U.S. equities market at the opening bell as stock-index futures pointed to a positive open in the wake of news that Cyprus locked down a bailout from the euro zone. But after jumping out of the gate modestly higher to start the week, all three major U.S. equity indexes have since reversed course to trade sharply lower.
According to media reports, the downdraft reflects reports out of Europe saying that eurogroup head Jeroen Dijsselbloem said the Cypriot bank restructuring plan should serve as a template for the rest of the Eurozone, triggering weakness in the Euro.
In what initially appeared to be a supportive development, Cyprus secured a 10 billion euro rescue package, agreeing to raise 4.2 billion euros by restructuring the country's banking sector and taxing bank deposits larger than 100,000 euros. Last week, the European Central Bank threatened to withdraw emergency aid from the Cypriot banking system if leaders were unable to come up with a deal to improve the country's financial sector - a move that briefly shook world markets.
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