Stock Futures Reverse Course On Cyprus Bailout Fears

6:45 AM, Mar 19, 2013   |    comments
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U.S. stock futures on Tuesday reversed course to trade lower, after initially setting to one side economic-instability fears sparked by the controversial terms of a bailout for Cyprus.

Read: Cyprus Faces Financial Crisis

Ahead of the opening bell, the Dow Jones industrial average index fell 0.04% to 14,384, the Standard & Poor's 500 index declined 0.07% to 1,545.70 and the Nasdaq-100 index traded 0.12% lower at 2,783.75.

In the prior session, the Dow dropped 0.4% to 14,452.06. The S&P 500 index fell 0.6% to 1,552.10. The Nasdaq composite index dropped 0.4% to 3,237.59.

Monday's sell-off came as investors fretted over the European Union's proposed terms for a $13 billion bailout for the island nation of Cyprus. A parliamentary vote on the measures, postponed over the weekend and on Monday also, is now expected to take place on Tuesday. The main thrust of the weekend proposal by the European Union would see bank deposits held by Cypriot savers hit with a tax of up to 10%.

On Tuesday, a new proposal from the Cyprus finance ministry is proposing that deposits below €20,000 ($25,900) would be exempt from any charge. Those between €20,000-€100,000 would have a 6.75% levy imposed, and those above €100,000 would have a 9.9% charge.

In Asia, most benchmarks rose moderately while Japan's Nikkei 225 index jumped 2.03% to 12,468.23. In Europe, the Stoxx Europe 600 index traded sideways at the start of the session, but has been falling steadily ahead of the parliamentary vote.

Benchmark oil for April delivery was up 5 cents to $93.79 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 29 cents to close at $93.74 per barrel on the Nymex on Monday.

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