* Cyprus reworks divisive bank tax, delays vote
* Banks lead decline; BofA off 1.6 pct, JPMorgan off 2 pct
* U.S. home builder sentiment eases in March-NAHB
* Indexes off: Dow 0.4 pct, S&P 0.7 pct, Nasdaq 0.7 pct
By Angela Moon
NEW YORK, March 18 U.S. stocks fell on Monday as
a divisive bailout plan for Cyprus knocked bank stocks lower on
the view that the plan's tax on bank deposits could spread and
threaten stability in the euro zone.
The losses on Wall Street also gave investors a reason to
lock in profits from the recent rally.
"It seems liked it shocked a lot of people initially, but if
you look at the bigger picture and see how small Cyprus is, it's
not a huge deal," said Joe Bell, senior equity analyst at
Schaeffer's Investment Research.
"But the worry is really about the possibility of contagion
to other European countries. Financials are lower here as well
also because of the worry that 'could it also happen here' which
I don't think is the case," Bell said.
The Dow Jones industrial average was down 53.76
points, or 0.37 percent, at 14,460.35. The Standard & Poor's 500
Index was down 10.44 points, or 0.67 percent, at
1,550.26. The Nasdaq Composite Index was down 21.43
points, or 0.66 percent, at 3,227.64.
The Dow closed at a record high of 14,539 just on Thursday.
The blue chip index is still up about 10 percent for the year
and the S&P 500 is up about 9 percent so far in 2013.
Hard-hit European stocks trimmed some losses after Cypriot
ministers sought to revise the plan to seize money from bank
deposits to help pay for the Mediterranean island's 10 billion
euro ($13 billion) bailout before a parliamentary vote on
The weekend announcement that Cyprus would impose a tax on
bank accounts by the European Union broke with previous practice
that depositors' savings were sacrosanct. The euro and stock
markets fell on concern the euro zone crisis was returning.
U.S. bank stocks were the biggest decliners including Bank
of America off 1.6 percent at $12.37, JPMorgan Chase &
Co off 2 percent at $49.02 and Citigroup fell 2.5
percent to $46.10.
Europe's Airbus has signed a 18.4 billion-euro deal
($24 billion) with low-cost Indonesian carrier Lion Air for 234
single-aisle passenger planes, poaching one of archrival
Boeing's fastest growing customers.
To get its 787 Dreamliner flying again, Boeing Co is testing
the plane's volatile battery system to a rigorous standard that
the company itself helped develop - but that it never used on
the jet. Boeing shares were down 0.9 percent at $85.67.
Highbridge Capital Management, a hedge fund manager owned by
JPMorgan Chase & Co, has raised a $5 billion mezzanine
debt fund, a spokesman said on Sunday, the latest alternative
asset firm seeking to seize on corporate credit opportunities.
Data showed U.S. homebuilder sentiment slipped in March,
falling to the lowest level in five months as supply chain
concerns and rising costs dented enthusiasm. Market reaction was
U.S. futures regulators are looking into whether high-speed
traders indulged in "wash trading," a strategy in which they
improperly buy and sell futures contracts without taking a
position in the market, the Wall Street Journal reported, citing
people familiar with the probes.