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Overnight Markets: Stocks fall as Cyprus lawmakers reject levy
by Himanshu Singh on Mar 20, 2013 at 05:41
Most US stocks declined on Tuesday, with the Standard & Poor’s 500 Index to its longest slump of the year, after the parliament of Cyprus rejected a proposed tax on bank deposits.
The Dow Jones industrial average edged up four points, or 0.03%, to close at 14,456. The S&P 500 Index fell four points, or 0.24%, to finish at 1,548. The Nasdaq Composite Index slipped eight points, or 0.26%, to close at 3,229.
Shares declined after the Cypriot parliament rejected the proposed tax on savings in banks, which was a condition of a European bailout, easing worries that savers will begin withdrawing funds. However, the move left efforts to rescue the country up in the air.
Meanwhile, housing starts data showed that groundbreaking to build new homes in the US surged in February and new permits for construction increased to their highest since 2008, signalling a building momentum in the US housing market's recovery.
Energy shares suffered the most after a drop in oil prices and a slide in the shares of oil services companies. Schlumberger Ltd (SLB.N) lost 3.1%, while Halliburton (HAL.N) declined 2.7%. Chesapeake Energy Corp. slumped 5.1% and Freeport-McMoRan Copper & Gold Inc. lost 1.6%.
Other declining shares included, Electronic Arts Inc (EA.O), which fell 8.3% a day after the video games publisher's chief executive resigned.
Shares of Cliffs Natural Resources Inc (CLF.N) fell 6.6% after Goldman Sachs slashed its price target for the iron ore producer's stock.
On the positive side, Walgreen Co (WAG.N) jumped up 5.4% after the company and its partner Alliance Boots ABN.UL said they signed a 10-year deal with AmerisourceBergen (ABC.N) and will take a stake in the distribution company, ending Walgreen's current contract with Cardinal Health Inc (CAH.N). Amerisource gained 3.6%, while Cardinal lost 8.2%.
Adobe Systems Inc climbed 5.6% after the bell after its results beat analysts' estimates.
In Asia, shares erased losses on Wednesday in morning trade as a rally in Chinese stocks offset declines fuelled after Cyprus’s rejection of a European bailout plan.
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