Wall Street ends flat on late buying, Cyprus woes linger

NEW YORK Wed Mar 27, 2013 5:35pm EDT

Traders work on the floor at the New York Stock Exchange, March 25, 2013. REUTERS/Brendan McDermid

Traders work on the floor at the New York Stock Exchange, March 25, 2013.

Credit: Reuters/Brendan McDermid

NEW YORK (Reuters) - Stocks rebounded from early declines to close little changed on Wednesday, but investors were still worried about the chance of a run on Cypriot banks and its possible implications for other euro-zone lenders.

Financial shares fell on both sides of the Atlantic on concerns that depositors at banks in other euro-zone 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 percent in morning trading, but in line with recent market behavior, 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 October 9, 2007. It is on track to post its fifth consecutive month of gains.

"Any time you have a run like we've had, market participants will look for a reason to take profits," said Bruce Zaro, chief technical strategist at Delta Global Asset Management in Boston.

"But pauses in this uptrend have been short and shallow. Everybody seems to want to buy in the slightest pullback."

The KBW bank index .BKX fell 0.6 percent and a gauge of European banks' stocks .SX7P dropped 0.5 percent. The PHLX Europe sector index .XEX declined 1.1 percent.

Cypriot banks are due to reopen on Thursday 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 .DJI fell 33.49 points or 0.23 percent, to 14,526.16 at the close. The S&P 500 .SPX lost just 0.92 of a point, or 0.06 percent, to finish at 1,562.85. The Nasdaq Composite .IXIC added 4.04 points or 0.12 percent, to close at 3,256.52.

Cliffs Natural Resources (CLF.N) shares hit a four-year low of $17.95 after Morgan Stanley downgraded the miner's stock and Credit Suisse slashed its price target, citing difficulties from a surplus of iron ore pellets in the Great Lakes region.

Cliffs Natural Resources shares closed at $18.46, off 13.9 percent.

Gilead Sciences (GILD.O) ended at a record high at $47.72, up 4.3 percent, after earlier reaching a lifetime intraday high at $47.83. Gilead's advance buoyed the Nasdaq Composite and helped the S&P 500 healthcare sector index .SPXHC rise 0.5 percent as the best performer of the day.

Data showed contracts to buy previously owned U.S. homes fell in February, held back by a shortage of properties, but there was little to suggest that the housing market recovery was stalling.

The PHLX housing sector index .HGX edged up 0.12 percent.

Volume was light, with some market participants out for the observance of Passover.

About 5.1 billion shares changed hands on the New York Stock Exchange, the Nasdaq and NYSE MKT, one of the lowest volume levels so far this year, and far below the daily average so far this year of about 6.4 billion shares.

Advancers outnumbered decliners on the New York Stock Exchange by a ratio of about 8 to 7. On the Nasdaq, about 13 stocks fell for every 12 that rose.

(Reporting by Rodrigo Campos and Chuck Mikolajczak; Editing by Jan Paschal)

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
Comments (4)
Changes2000 wrote:
EU is doomed at the moment its government supports/endorse policy to take away money “automatically” and “legally” from ordinary people’s savings accounts. This policy has set Europe civilization backward to the barbaric time.

Mar 27, 2013 2:48pm EDT  --  Report as abuse
MikeyLikesIt wrote:
I’m not sure it will regress as far as Changes2000 is saying, but the EU is about to feel some major pains when the bank runs happen. It might start small, but the moment the people in Spain or Greece or Italy think that it would happen to them the rush will begin.

It will be interesting to see if the controls set up by Cyprus will stem the flood of money out of the banks enough to keep them from running out of cash. Even with a dollar limit these institutions can’t have that much in reserve to deal with tens or even hundreds of thousands of people taking out their $100 every day.

Mar 27, 2013 5:11pm EDT  --  Report as abuse
This is why speculators should be prosecuted. A tiny island country with just over a million people should have absolutely no affect on US stocks. So what if there is a run on Cypriot banks. It really shows the flaws in the entire economic order and makes me wish for a true mutual banking system without legal tender laws. Competition first and always, especially among currencies and banking. Let the open markets and public opinion decide. It’s the only way to economic order and security that isn’t hinged on the belief that government officials are made of a finer clay than the rest of us and immune to corruption.

Mar 27, 2013 5:37pm EDT  --  Report as abuse
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.