The stock market fell on Thursday after Oracle’s weak sales results weighed down big technology companies. Traders also worried that Cyprus was running out of time to avoid a collapse of its financial system.
The American market followed its European counterparts lower at the open and remained solidly negative all day. The Dow Jones industrial average fell as much as 129 points by midafternoon before paring the loss to close down 90 points.
All three major indexes felt the drag from technology stocks after Oracle reported an unexpected decline in sales in its fiscal third quarter. Oracle’s results have an outsize impact on other technology stocks because it reports earlier than most of its peers.
European markets closed sharply lower. The main indexes in Paris and Frankfurt fell 1.4 percent and 0.9 percent on fears that the crisis in Cyprus would intensify. The European Central Bank has threatened to end emergency support of the nation’s banks next week unless leaders can secure more financing.
Cyprus must raise about $7.5 billion in the next four days to avoid bankruptcy. Several plans have failed, including a proposal to tax deposits held by the nation’s banks. If Cyprus is unable to secure a bailout, its banks will fail and it could be forced to leave the euro currency. Worries about that possibility first hit stock markets Monday.
“It’s amazing how quickly things can turn back to Cyprus and Europe,” said Oliver Cross, director of research with Carolinas Investment Consulting.
Oracle was the biggest decliner in the Standard Poor’s 500-stock index, falling $3.47, or 9.7 percent, to $32.30. The S. P. 500-stock index lost 12.91 points, or 0.8 percent, to 1,545.80.
The Dow Jones industrial average dropped 90.24 points, or 0.6 percent, to 14,421.49. Cisco Systems was the Dow’s biggest loser, dropping 83 cents, or 3.8 percent, to $20.84.
The Nasdaq composite index, which is weighted heavily toward technology stocks, fell 31.59 points, or 1 percent, to 3,222.60.
Despite being down for the week, the Dow remains near a record high. Its run-up has been powered by optimism about the United States economy and the Federal Reserve’s easy-money policies. The Dow is up 2.6 percent this month. The S. P. 500 has gained 2.1 percent in March.
Given the market’s recent strength, many analysts have been anticipating a decline at the first sign of bad news — whether from Europe, corporate America or the American economy.
A sharp sell-off, however, has not materialized, said Troy Logan, managing director and senior economist at Warren Financial Service. He said Thursday’s losses could have been much worse.
“We thought Cyprus would be the perfect opportunity for the market to step back, but it looks like the market has shrugged it off,” Mr. Logan said.
The job and housing markets continue to improve gradually, according to economic reports released Thursday. The Labor Department said the number of people claiming new unemployment benefits last week was about flat near a five-year low. Sales of used homes rose in February to a three-year high, according to the National Association of Realtors.
Among the stocks on the move, AstraZeneca rose after saying it would cut 2,300 more jobs worldwide and overhaul its research operations. That brings to 11,000 the number of job cuts announced in the last 13 months. Its shares rose $1.77, or 3.8 percent, to $47.95.
The Movado Group fell after the luxury watchmaker said its fiscal fourth-quarter net income fell 26 percent. Its stock dropped $3.89, or 10.5 percent, to $33.23.
In the bond market, the price of the Treasury’s 10-year note rose 13/32, to 100 25/32, while its yield dropped to 1.91 percent, from 1.96 percent late Wednesday.
Article source: http://www.nytimes.com/2013/03/22/business/daily-stock-market-activity.html?partner=rss&emc=rss
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