U.S. Stocks Fight Back After Cyprus Bombshell; Gold Retakes $1600 Level
U.S. stocks continue to be pressured by news that the European Union is considering a plan to impose a levy on bank deposits in Cyprus in order to provide a financial bailout to the country. Although the amount of the aid generated by the plan, $12.9 billion, may not be a huge number in relative terms, the nature of the bailout terms sent shockwaves through world markets. The Dow opened almost 100 points down. But buyers quickly stepped in to pare those losses, with the big three U.S. equity indexes currently trading near their best levels of the day.
According to reports, the EU will require a one-time tax of 6.75% on bank deposits of less than 100,000 euros, and 9.9% tax for those over 100,000 euros, a move many are dubbing "legalized bank robbery." A vote on this bailout, originally scheduled for today, is rumored to have been pushed back, with debate continuing on the terms of the deal. Currently, the vote is expected to take place this evening.
Stateside, the NAHB Housing Market Index, a gauge of homebuilder's confidence, registered a reading of 44, which was down from the prior month's reading of 46. Today's reading also missed the Briefing.com consensus which anticipated a 48. The 44 reading was the lowest since October.
As expected, global markets have reacted negatively to the Cyprus news, with European bourses sporting moderate losses across the board. Selling in Asia has been more pronounced, as most of the major indexes in the region down between 1.7 - 2.7%.
Overall, commodity prices were mixed, with oil down slightly, $0.26, at $93.19 a barrel. Natural gas continued its impressive rally, up $0.062 to $3.934 per million BTUs.
Precious metals regained a bit of lost luster in the wake of the Cyprus bailout bombshell, with gold futures rising $10.20 to $1602.80 per ounce, while silver was up fractionally, $0.004, to $28.85 per ounce. Copper was down $0.086 to $3.4345.
Here's where the markets stood at mid-day:
NYSE Composite down 50.32 (-0.55%) to 9,066.30
Dow Jones Industrial Average down 25.15 (-0.17%) to 14,488.96
S&P 500 down 5.89 (-0.38%) to 1,554.81
Nasdaq Composite Index down 9.21 (-0.28%) to 3,239.86
Nikkei 225 Index down 2.71%
Hang Seng Index down 2.00%
Shanghai China Composite Index down 1.69%
FTSE 100 Index down 0.55%
DAX down 1.03%
CAC 40 down 0.96%
NYSE SECTOR INDICES
NYSE Energy Sector Index (^NYE) down 76.11 (-0.57%) at 13,258.28
NYSE Financial Sector Index (^NYK) down 56.08 (-1.00%) to 5,528.10
NYSE Healthcare Sector Index (^NYP) down 54.80 (-0.63%) to 8,634.12
(+) CLSN (+3.3%, off day highs but moving it away from near year lows) Shares rise after company reported a full year 2012 loss of $0.76 per share, vs. a year ago loss of $1.11 per share.
(+) JCP (+9.4%) Beaten down shares of discount retailer fly off the shelf after Oppenheimer said its store tours over the weekend suggested customers look to be reacting positively to the Joe Fresh launch on Friday, according to MarketWatch.
(+) FU (+10%) Stock jumps after company reports revenues of $24.0 million, up from $879,912 in the fourth quarter of 2011, with net income of $2,274,415 or $0.11 per share versus a net loss of$7.8 mln or $1.03 per share in 2011.
(-) ADVS (-7.4%) Software firm shares fall after the company says it completed its review of strategic alternatives. The company's board of directors said that it believes "it is in the best interests of the company and its shareholders to continue to execute on its strategic plan as an independent company."
(-) INCY (-7%) Shares are under pressure after the company was informed, last week, of a case of progressive multifocal leukoencephalopathy in a 75 year old male patient from the UK with myelofibrosis treated with the company's ruxolitinib.
(-) ENTR (-6.6%) Selling takes hold after company says it expects Q1 revenue between $74 mln to $76 mln,below its prior view of $79 mln to $81 mln and south of the Street view of $80 mln.
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