NEW YORK (AP) — Stocks fell for a second day on Wall Street on concern that 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 39 points, or 0.3 percent, to 14,472 as of 11 a.m. EDT. The Dow fell as much as 110 points in the early going, before recouping some of its loss.
The Standard & Poor’s 500 index fell eight points, or 0.5 percent, to 1,552. The Nasdaq composite dropped 17 points, or 0.5 percent, to 3,232.
Cyprus is proposing a hefty levy on bank deposits as a condition for a national bailout. The proposal roiled international markets and the measures are stoking fears of bank runs in the other 16 nations that use the euro.
Concerns persist about the euro-region’s lingering debt crisis, despite a strong rally in stocks since the start of the year that pushed the Dow to record highs. The index 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.
Financial stocks led declines on the S&P 500. Investment bank Morgan Stanley was the second-biggest decliner in the S&P 500, falling 96 cents, or 4 percent, to $22.64. Citigroup dropped $1.15 to $46.12.
“Europe has got problems,” said Uri Landesman, president of Platinum Partners, a hedge fund. “You could get more stuff like this and the market isn’t priced to handle that.”
Stocks have advanced 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.
The Dow is still up 10.5 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.
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.
Homebuilders fell Monday after a report showed that confidence among U.S. homebuilders dropped this month because of concerns that limited land, building materials and labor will slow sales. The National Association of Home Builders/Wells Fargo builder sentiment index fell to 44 from 46 in February, with measures of customer traffic and current sales conditions both declining from February.
D.R. Horton dropped 28 cents to $24.05, cutting this year’s gain to 22 percent. PulteGroup fell 20 cents to $20.56, paring its advance this year to 13 percent.
Markets in Europe and Asia also fell. The dollar rose a penny against the euro, its biggest move in a week, 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 1.94 percent from 1.99 percent.
Among other stocks making big moves:
— Schlumberger dropped $2.15 to $77.69 after the oilfield services company said that its first quarter activity was below its expectations as customers reactivated fewer rigs than forecast.
More Related Stories
- Illinois' fracking and coal rush is a national crisis
- Developers evict historic women's shelter to build luxury hotel
- Kaitlyn Hunt refuses plea offer, will go to court over high school relationship
- DHS admits "impossible" to control 3D-printed guns
- Journalists file suit against Manning trial secrecy
- Russia: Syrian regime ready to talk peace
- Report: Nearly a quarter of all Americans struggle to afford food
- Ted Cruz against the world
- Louie Gohmert: Women should be forced to carry nonviable pregnancies to term
- 2 men arrested for endangering commercial aircraft
- Oversized load blamed for bridge collapse
- This is what Guy Fieri looks like as a balloon
- Iran hackers aiming at U.S. energy firms
- Lawyers release data in attempt to discredit Trayvon Martin
- Anonymous rallies behind Kaitlyn Hunt
- Bridge collapse: Part of "aging infrastructure"
- Mistrial in penalty phase of Arias case
- Amanda Bynes arrested after hurling bong from window
- Interstate 5 bridge collapses north of Seattle
- Mississippi could begin prosecuting women for miscarriages
- Teenage girl claims she was beaten up for looking like Taylor Swift
Featured Slide Shows
The week in 10 picsclose X
- 1 of 11
Lisa Montgomery embraces her nephew Thursday after a tornado tore apart her home in Cleburne, Texas. The twister killed six people and destroyed entire swaths of the North Texas town.
Credit: AP/LM Otero
Jack McMahon, the defense attorney for abortion doctor Kermit Gosnell, speaks outside the Criminal Justice Center in Philadelphia Tuesday. His client was convicted of killing three babies in his clinic, and will serve multiple life sentences.
Credit: AP/Matt Rourke
A photo taken Monday captures Vice President Joe Biden's response to a Milwaukee second-grader's innovative proposal to end America's epidemic of gun violence. This guy!
Credit: AP/Jenny Aicher
Sen. Rand Paul, R-Ky., flanked by a grouper-eyed Michele Bachmann, addresses the IRS' admission that it targeted Tea Party groups in advance of the 2012 election. In an op-ed for CNN Thursday, the Kentucky senator slammed the president for his faux outrage.
Credit: AP/Molly Riley
Ousted IRS chief Steven Miller is sworn in on Capitol Hill Friday. Miller testified before the House Ways and Means Committee on the extra scrutiny the agency gave conservative groups applying for tax-exempt status.
Credit: AP/J. Scott Applewhite
Attorney General Eric Holder pauses as he testifies on Capitol Hill before the House Judiciary Committee Wednesday. Holder is under fire, among other things, for the Justice Department's gathering of phone records at the Associated Press.
Credit: AP/Carolyn Kaster
O.J. Simpson sits during an evidentiary hearing at Clark County District Court in Las Vegas, Nev., Thursday. Simpson, who is currently serving a nine-to-33-year sentence in state prison for armed robbery and kidnapping, is using a writ of habeas corpus to seek a new trial.
Credit: AP/Las Vegas Review-Journal/Jeff Scheid
Major Tom to ground control: On Sunday astronaut Chris Hadfield recorded the first music video from space, a cover of David Bowie's "Space Oddity."
Credit: AP/NASA/Chris Hadfield
When it rains it pours. President Barack Obama speaks during a news conference Thursday with Turkish Prime Minister Recep Tayyip Erdogan, inexplicably inspiring an #umbrellagate Twitter meme.
Credit: AP/Jacquelyn Martin
A smoke plume rises high above a road block at the intersection of County A and Ross Road east of Solon Springs, Wis., Tuesday. No injuries were reported, but the the wildfire caused evacuations across northwestern Wisconsin.
Credit: AP/The Duluth News-Tribune/Clint Austin
Recent Slide Shows
- 1 of 11