FOX Business: Capitalism Lives Here
Continue Reading Below
After starting the day higher, Wall Street took a turn into negative territory as traders parsed through a deluge of headlines from embattled Cyprus.
As of 3:30 p.m. ET, the Dow Jones Industrial Average fell 25.4 points, or 0.18%, to 14427, the S&P 500 dipped 7.7 points, or 0.5%, to 15455 and the Nasdaq Composite slumped 17.9 points, or 0.55%, to 3220.
The week kicked off with a choppy trading session, and a reminder that the eurozone's debt crisis can still flare up. Cyprus' financial and political landscape have been roiled by a bailout proposal that would have tapped depositors' bank accounts as partial funding. The Cypriot parliament knocked it down, raising the specter of a default. The country's banking system was also at risk of collapse, with its two biggest banks teetering.
The trouble threatened to boil over into more systemically-important countries, like Italy and Spain, by making borrowing costs there jump. The European Central Bank said it stands ready to provide liquidity "as needed" to banks that are solvent or have the clear prospect of becoming solvent with aid.
Continue Reading Below
Additionally, Kathimerini, a Greek newspaper, reported that Cypriot Finance Minister Michalis Sarris was likely to be pushed out of his position. That report could not immediately be independently verified.
Also on the European front, a closely-watched reading on German economic sentiment from the ZEW Institute unexpectedly ticked slightly higher. Germany is Europe's biggest economy, but it has taken a beating from the eurozone debt crisis.
There was also a key report out on the U.S. housing market.
The Commerce Department said housing starts increased 0.8% last month to a 917,000-unit annual rate, slightly better than expectations of 915,000. Permits for construction jumped 4.6% to a 946,000-unit rate, also coming in ahead of estimates of 925,000. Both readings were the highest since June 2008.
The market for new homes has been showing signs of improvement in recent months, and many economists say housing more broadly is going to be an increasingly big part of the economic recovery.
On the corporate front, Citigroup (C) said it would pay $730 million to settle a class-action lawsuit over financial disclosures during the financial crisis. The nation's third-biggest bank by assets denied any wrongdoing in the case. UBS (UBS) said it would exit the EURLibor setting panel as it continues shrinking down its investment-banking operations.
Energy futures were down sharply. The benchmark U.S. crude oil contract sold off $1.58, or 1.7%, to $92.16 a barrel. Wholesale New York Harbor gasoline plummeted 2.7% to $3.05 a gallon. In metals, gold rose $6.70, or 0.42%, to $1,611 a troy ounce.
The Euro Stoxx 50 slumped 0.57% to 2690, the English FTSE 100 slipped 0.16% to 6448 and the German DAX fell 0.39% to 7981.
In Asia, the Japanese Nikkei 225 surged 2% to 12468 and the Chinese Hang Seng dipped 0.19% to 22042.