NEW YORK REPORT
US stocks rebounded from early declines to close little changed yesterday, but investors were still worried about the chance of a run on Cypriot banks and its possible implications for other Eurozone lenders.
Financial shares fell on concerns that depositors at banks in other Eurozone countries will withdraw large amounts of money. Investors are worried that the Cyprus bailout would become a template for solving banking crises in the region.
The S&P 500 fell 0.8 per cent in morning trading, but in line with recent market behaviour, investors took the drop as a buying opportunity. By the close, late buying had helped the S&P 500 cut most of the session’s losses to end down less than a point.
The benchmark S&P 500 has traded within 10 points of its record closing high for 13 consecutive days, without once moving above the 1,565.15 level set on 9 October 2007.
“Any time you have a run like we’ve had, market participants will look for a reason to take profits,” said Bruce Zaro of Delta Global Asset Management.
“But pauses in this uptrend have been short and shallow. Everybody seems to want to buy in the slightest pullback.”
Cypriot banks are due to reopen today while limiting withdrawals, banning checks and curbing the use of Cypriot credit cards abroad, after being closed for almost two weeks. Uninsured deposits in Cyprus are expected to be reduced as part of the rescue deal.
The Dow Jones industrial average fell 33.49 points or 0.23 per cent, to 14,526.16 at the close. The S&P 500 lost just 0.92 of a point, or 0.06 per cent, to finish at 1,562.85. The Nasdaq Composite added 4.04 points or 0.12 per cent, to close at 3,256.52.