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U.S. stocks sharply lower, eyes on Cyprus; Dow Jones down 0.53%

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Investing.com - U.S. stocks opened sharply lower on Monday, as concerns over the handling of the debt crisis in the euro zone re-emerged after the announcement of a controversial bailout plan for Cyprus.

During early U.S. trade, the Dow Jones Industrial Average dropped 0.53%, the S&P 500 index declined 0.76%, while the Nasdaq Composite index slid 0.70%.

On Saturday, the European Union and International Monetary Fund reached an agreement on a EUR10 billion bailout for Cyprus. In return for the bailout international creditors demanded that all bank customers must pay a one-time tax on deposits.

The agreement marked the first time since the onset of the debt crisis that depositors have been forced to take a haircut in return for financial aid and triggered a run on cash machines in Cyprus over the weekend.

The parliament in Cyprus was to vote on whether to approve the tax proposal later in the day. If the vote was defeated media outlets in Cyprus said banks could remain closed on Tuesday, following a public holiday on Monday, to avoid mass withdrawals.

Financial stocks were broadly lower, as U.S. lenders tracked their European counterparts' weak performances following the bailout news. Shares in JP Morgan tumbled 2.06% and Bank of America plummeted 1.67%, while Goldman Sachs and Citigroup plunged 2.13% and 2.60% respectively.

Separately, Bloomberg reported earlier that Bank of America hired two debt capital markets bankers from Credit Suiss, as the U.S. lender reorganizes its Asian bond and loan arranging unit.

Also on the downside, Boeing retreated 1.07%, even amid reports it was testing its 787 Dreamliner's volatile battery system to a rigorous standard that the company itself helped develop.

In addition, Europe's Airbus reportedly landed a record order potentially worth USD20 billion from Indonesia's Lion Air.

On the upside, Apple climbed 0.61%, amid speculation the tech giant is preparing to boost its dividend by more than half.

Elsewhere, directories publishers Dex One Corp and SuperMedia filed for bankruptcy after failing to win the full support of senior secured lenders for a change to a credit agreement that was needed to complete their planned merger.

Across the Atlantic, European stock markets were sharply lower. The EURO STOXX 50 tumbled 1.59%, France's CAC 40 tumbled 1.21%, Germany's DAX retreated 1.07%, while Britain's FTSE 100 lost 0.63%.

During the Asian trading session, Hong Kong's Hang Seng Index plummeted 2%, while Japan's Nikkei 225 Index plunged 2.71%.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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