Wall Street falls on euro zone growth worries; Oracle drops

NDTV Profit Desk

22 Mar 2013, 08:35 AM IST

US stocks declined on Thursday, dragged down by concerns about euro-zone growth and Oracle's sharp miss on quarterly results, which weighed on tech shares.

Worries about Cypriot finances increased after the European Union gave Cyprus until Monday to raise the billions of euros it needs to get an international bailout, or face the collapse of its financial system and likely exit from the euro bloc.

Investors fear a collapse of the banking system in Cyprus will tighten credit across Europe and become yet another hurdle in the region's bumpy road out of economic crisis.

The worries over Cyrus hit the market after weeks of gains that saw the Dow break record highs and the S&P 500 come within striking distance of its all-time record close of 1,565.15.

"As there's a little more anxiety about what's happening in Cyprus and Europe overall, you're seeing traders looking to pare back risk exposure," said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles.

"I think the realization is, there isn't going to be a quick remedy to the situation, nor is it easy to forecast what's going to happen. Uncertainty breeds selling, especially in a market that's gone as far as we have in the previous two weeks," he added.

Oracle Corp shares lost 9.2 per cent to $32.47 and were the biggest drag on the Nasdaq 100. A number of brokerages cut their price targets on the stock following a massive miss on its third-quarter results.

Cisco was the Dow's biggest percentage loser, down 4.1 per cent at $20.78, after brokerage FBR downgraded its rating on the network equipment maker's stock and cut its price target.

The S&P basic materials sector index fell 1.4 per cent, making it the heaviest weight on the S&P 500.

The Dow Jones industrial average slipped 72.27 points, or 0.50 per cent, to 14,439.46.

The Standard & Poor's 500 Index fell 11.24 points, or 0.72 per cent, to 1,547.47.

The Nasdaq Composite Index shed 29.11 points, or 0.89 per cent, to 3,225.07.

The benchmark S&P 500 index is on track to post only its second weekly percentage drop so far this year, a testament to its impressive 2013 run.

Adding to worries about the health of the euro zone, data showed the euro zone's economy contracted more than expected in March. The news overshadowed a batch of reports suggesting the US economic recovery was on the right track and solid first-quarter growth in China.

A downward trend in jobless claims, an increase in factory activity and a rise in sales of existing homes pointed to growing momentum in the US economy during the first quarter of the year. Initial claims for US unemployment benefits inched higher in the latest week, but the four-week average of new claims - a measure of labor market trends - fell to its lowest level in five years.