On Thursday morning, stocks seemed prepared to run with the momentum of the previous day’s close, but had erased all of those gains by the end of trading, faltering on renewed worries out of the Eurozone, as well as a lag in the tech sector.
A controversial bank tax plan that would have qualified the small island nation of Cyprus for a desperately needed injection of funds from the European Central Bank was rejected by that country’s parliament on Tuesday.
The island’s legislators are reported to be working on a plan to restructure the country’s banking system in order to retain the possibility of continued aid, and reopen commercial banking by next Tuesday. But the European Union caused jitters by issuing an ultimatum to the country that it had until Monday to raise the nearly 6 billion euros that it would need to qualify for an emergency bailout.
Investors are fearful of any number of outcomes, from a run on the banks that could spread to the mainland, to Cyprus’s exit from the European Union, a spectrum of possibilities that could cause a great deal of trouble in an already fragile and unstable economic landscape.
The Nasdaq closed down almost a whole percentage point to 3,226.88, with significant pressure coming from Oracle Corp (ORCL), whose shares lost 9.2 percent to close at $32.47, after Wednesday’s earnings report that saw the company fall short on revenue estimates.
Online retail giant Amazon.com (AMZN) lost 1.51 percent on the day to end at $253.39.
The Dow was down 0.62 percent to 14,421.49, with its biggest drag being Cisco (CSCO), down 3.83 percent to $20.84 on news that the company’s stock was downgraded, with price targets being cut from $22 to $17.
Hewlett-Packard (HPQ) was down 2.62 percent to $22.32, IBM (IBM) lost 1.30 percent to $212.26, and Microsoft (MSFT) inched downwards 0.74 percent to $28.11.
Meanwhile, the S&P 500 shed 0.83 percent to end the day at 1,5445.80, with notable losses coming from J.C. Penney (JCP) and Goldman Sachs (GS), while gainers were led by Yahoo Inc. (YHOO) and Ross Stores (ROST).
Today’s losses came in spite of the fact that the House of Representatives passed the Senate’s bill to avert a government shutdown next week, while existing home sales hit their highest rate since 2009 and the Labor Department reported that initial jobless claims were hovering near a five year low.