Wall St ends lower on angst about Cyprus bailout plan
U.S. stocks fell on Monday after a plan to tax bank accounts in Cyprus to help pay for the country's bailout stoked worries that it could threaten the stability of financial institutions in the euro zone.
The move pushed the S&P 500 farther from its record closing high of 1,565.15 after the index came within striking distance of the level last week.
Financial stocks led the day's decline, with the S&P 500 financial index down 1 percent, following a steep slide in European bank shares. JPMorgan Chase fell 1 percent to $49.51.
Cypriot ministers were trying to revise a plan to seize money from bank deposits before a parliamentary vote on Tuesday that will secure the island's financial rescue or could lead to its default.
European officials have said the measure is a one-off for a country that accounts for just 0.2 percent of European output. The fear is that savers in larger European countries will become nervous and start withdrawing funds, although there was no immediate sign of that on Monday.
"There are worries about whether there will be any spillover from the Cyprus situation," said Nick Sargen, chief investment officer at Fort Washington Investment Advisors in Cincinnati, which oversees more than $45 billion.
"Will authorities be able to convince markets that this proposal is only for this unique situation, for such a small country where the banking system is more of a tax shelter? If they can't, that might cause new concerns about Europe's banking system."
The Dow Jones industrial average slipped 62.05 points, or
Be the first to comment.
