US stocks fall on renewed eurozone fears

US stocks fall on renewed eurozone fears

NEW YORK - US stock markets fell in early trade Monday amid concerns that the controversial Cyprus bailout could reignite the eurozone crisis.

About 30 minutes into trade, the Dow Jones Industrial Average gave up 49.41 (0.34 per cent) to 14,464.70.

The broad-based S&P 500, which last week appeared poised to break its all time record, declined 10.20 (0.65 per cent) to 1,550.50.

The tech-rich Nasdaq Composite Index lost 21.55 (0.66 per cent) to 3,227.52.

The requirement that the 10 billion euro (S$16.2 billion) bailout include a tax on deposits in Cyprus banks has stirred anger and worries that go well beyond the tiny island nation.

"There is heightened concern that this bailout plan will force a run on banks, particularly in troubled peripheral countries, as other depositors worry about the potential of being hit with a similar tax on deposits in the future," said analyst Patrick O'Hare.

"The structure of the bailout deal has opened a whole new can of worms, inviting talk of a possible Cyprus exit from the eurozone and reinvigorating concerns about the eurozone debt crisis."

Banking equities were lower, including JP Morgan (-1.5 per cent), Bank of America (-1.5 per cent), Wells Fargo (-1.5 per cent), Morgan Stanley (-3.0 per cent) and Goldman Sachs (-1.8 per cent).

Constellation Brands gained 2.2 per cent after the Justice Department requested that a federal court extend a stay on its antitrust case against the proposed Anheuser-Busch Inbev-Grupo Modelo merger.

Constellation stands to benefit by picking up distribution units from Modelo to enable the merger to go through.

AB Inbev was up 0.1 per cent.

Boeing dropped 1.0 per cent after rival Airbus signed a giant deal with Indonesia's Lion Air worth US$24 billion (S$30 billion).

Bond prices rose. The yield on the 10-year Treasury fell to 1.95 per cent from 2.00 per cent late Friday, while the 30-year yield fell to 3.16 per cent from 3.23 per cent late Friday. Bond prices and yields move inversely.

Your daily good stuff - AsiaOne stories delivered straight to your inbox
By signing up, you agree to our Privacy policy and Terms and Conditions.