U.S. stocks finished mostly lower, Monday, trimming their earlier losses experienced after news hit that the European Union is considering a plan to impose a levy on bank deposits in Cyprus in order to provide a financial bailout to the country.
According to reports, the EU will require a one-time tax of 6.75% on bank deposits of less than 100,000 euros, and 9.9% tax for those over 100,000 euros, a move many are dubbing "legalized bank robbery." A vote on this bailout, originally scheduled sometime Monday, is said to have been pushed back, with debate continuing on the terms of the deal. By day's end, the Parliament had put off the vote for at least another day say its banks would remain closed through Thursday.
First Fear Then Calm
While the news caused some initial panic in the markets -- the Dow shed 100 points at opening bell -- fears of the potential fallout from Cypriot bailout request retreated as trading progressed. In a note, analysts at Barclays Capital commented that given the small size of Cyprus' economy it is unlikely that financial contagion will spread through the euro zone. The Cypriot economy makes up less than 0.5% of the euro zone's output. "We consider the likelihood of a bank run in other periphery countries to be limited, including in Greece," the analysts wrote in the report.
Stateside, the NAHB Housing Market Index, a gauge of home builder's confidence, registered a reading of 44, which was down from the prior month's reading of 46. Today's reading also missed the Briefing.com consensus which anticipated a 48. The 44 reading was the lowest since October.
Commodities finished mixed. Oil futures added 0.26% to close at $93.69 a barrel, while gold futures closed up 0.75% at $1,604.60 per ounce.
Here's Where The Markets Stood At Day's End
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