Unease For Cyprus Leads to US Stock Decrease

Thursday saw stocks in the US falling as investors were looking or safe places for their money. They looked to Yen and safe haven dollars because of the uncertainty surrounding the situation in Cyprus.

There was also some weak European manufacturing data which did not help the outlook.

When US Trading closed the Dow Jones Industrial Average was down by 0.62% while the S&P 500 Index was down by 0.83% and the Nasdaq Composite also fell by 0.97%

There was a proposal from the EU to put taxes on bank deposits, to help raise some of the EUR 8 billion that needed to be found so that they can help to bail them out. However, this was turned fown by the parliament and so new ways to help themselves need to be found if they want help from Europe and the International Monetary Fund. 

The banks have been closed in Cyprus, to give them time to make decisions and this will remain the case until Monday.
There was a plan outlined by one Cypriot banker to protect any accounts that held less that EUR 100,000 which could make the tax proposal more favourable, but this was ignored.

The European Central bank has worked to reassure the islanders by saying that they will make sure that assets are not at risk and there is still liquidity in the island.

There was also other bad date from Europe.

A three month low figure was seen in the Eurozones manufacturing purchase managers index which was 46.6 in march down from 47.9 in February. It was actually expected to make a gain up to 48.2.

There was also an unpredicted drop for the Eurozone Services PMI which went down to a five month low in March at 46.5, having been expected t go up to 48.2.

Markit, a London based economist, reported the above two results as well as the fact that Germany’s manufacturing PMI also fell in March to 48.9 and this was expected to rise a small amount. Their service sector also saw a very slow rate of expansion, in fact the slowest in four months.

French manufacturing PMI was unchanged in March, compared to the previous month although the service sector activity went down to 41.9 which is a 49 month low for that sector.

In the US less people filed for jobless claims last week, compared to the previous one.
On Thursday some sold data coming out of the US did not raise the spirits though.
The US Department of Labour had explained that it had been expected that there would be a rise of 8000 people filing for jobless benefits and they actually only saw a rise of 2000 which was far better than predicted.

They also found that they manufacturing figures were better than they had expected as well.

As reported by the Federal Reserve Bank of Philadelphia, they found that manufacturing expanded at its fastest rate in three months, during March with the index rising up by two points. It was predicted that it would actually go down by two points.
It was also reported by the National association of Realtors that home sales had gone up by 0.8% in February which is the highest level in three years.

A selection of the best industrial performers on the Dow Jones included United health Group up 0.35%, Verizon Communications up 0.43% and Coca-Cola up 0.53%

The worst industrial performers on the Dow Jones were Hewlett-Packard down 2.66%, Bank of America down by 1.64% and Cisco Systems down by 3.83%.

The European indices finished lower than this though.
EURO STOXX 50 fell 0.92% at the close of trade and Frances CAC 40 fell by 1.43%. The UK FTSE 100 went down by 0.69& and the German DAX 30 went down by 0.97%.