Wall Street hit as anxiety over Eurozone builds

NEW YORK REPORT

US stocks fell yesterday as Oracle’s revenue fell far short of expectations and worries intensified about the effect of Cyprus’ troubles on the Eurozone.

Oracle shares lost 9.7 per cent to $32.30 and were the biggest drag on Nasdaq, a day after its revenue disappointment, which it blamed on sales execution. It was the stock’s biggest percentage drop since December 2011.

Stock losses accelerated late in the session as anxiety about Cypriot finances increased. Just before the US market’s close, Standard & Poor’s cut Cyprus’ sovereign credit rating deeper into junk status.

The European Union gave Cyprus until Monday to raise the billions of euros it needs to get an international bailout – or face the collapse of its financial system and likely exit from the euro bloc.

“I think the realisation is, there isn’t going to be a quick remedy to the situation, nor is it easy to forecast what’s going to happen. Uncertainty breeds selling, especially in a market that's gone as far as we have in the previous two weeks,” said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles.

The latest Eurozone concerns hit the market after weeks of gains that drove the Dow up to break record highs and lifted the S&P 500 to within striking distance of its all-time record close of 1,565.15.

Investors fear a collapse of the banking system in Cyprus will tighten credit across Europe and become yet another hurdle on the region’s bumpy road out of economic crisis.

The Dow Jones industrial average slid 90.24 points, or 0.62 per cent, to end at 14,421.49. The Standard & Poor’s 500 Index dropped 12.91 points, or 0.83 per cent, to finish at 1,545.80. The Nasdaq Composite Index lost 31.59 points, or 0.97 per cent, to close at 3,222.60.