Oracle, Cyprus news weigh down stocks
Tech firm's low sales founder its industry; nation nears euro exit
Stocks closed lower Thursday on Wall Street after Oracle's weak sales results weighed down big U.S. technology companies. Traders also worried about Cyprus running out of time to avoid bankruptcy.
Major indexes followed European markets lower at the open and remained solidly negative all day. The Dow Jones industrial average fell as much as 129 points by mid-afternoon before paring the loss to close down 90 points.
All three major indexes felt the drag from technology stocks after Oracle reported an unexpected decline in sales in its fiscal third quarter. Oracle's results have an outsized impact on other technology stocks because it reports earlier than most of its peers.
European markets had closed sharply lower. The main indexes in Paris and Frankfurt fell 1.4 percent and 0.9 percent, respectively, on fear that the crisis in Cyprus will intensify. The European Central Bank has threatened to end emergency support of the nation's banks next week unless leaders can secure more funding.
Cyprus must raise about $7.5 billion in the next four days to avoid bankruptcy. Several plans have failed, including a proposal to tax deposits held by the nation's banks. If the Mediterranean banking haven is unable to secure a bailout, its banks will fail and it could be forced to leave the euro currency. Worries about that scenario first hit stock markets Monday.
"It's amazing how quickly things can turn back to Cyprus and Europe," said Oliver Cross, director of research with Carolinas Investment Consulting LLC in Charlotte, N.C. Cross spent his day focused on headlines from Europe, rather than digesting happier news about hiring and home sales in the U.S.
Oracle was the biggest decliner in the S&P 500 index; Juniper Networks also fell steeply. The S&P 500 closed down 12.91 points, or 0.8 percent, at 1,545.80.
The Dow dropped 90.24 points, or 0.6 percent, to 14,421.49. Cisco was the Dow's biggest loser, followed by H-P. IBM also lost ground.
The Nasdaq, which is weighted heavily toward tech stocks, fell a full percentage point. It closed down 31.59 points at 3,222.60.
Despite being down for the week, the Dow remains near a record high. Its run-up has been powered by optimism about the U.S. economy and the Federal Reserve's easy-money policies. The Dow is up 2.6 percent this month. The S&P 500 has gained 2.1 percent in March, and is 20 points from its own all-time high set in October 2007.
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