Skip to Content
Midday Market Update

Stocks Lower; Cyprus, Fed Eyed

Mentioned: , , , , ,

U.S. Market    
Stocks fell at midday as investors digested continuing concerns regarding Cyprus and focused on several data reports and the Federal Open Market Committee's two-day meeting, which began today. 

After yesterday's global sell-off on account of the Cypriot bailout and conditional bank-deposit levy, Cyprus' parliament was examining a new proposal that would remove the tax on deposits of EUR 20,000 and lower. Cyprus also suspended trading on its exchange for two days to avoid any additional shocks. Recent reports at midday indicate the nation's finance minister has resigned, and worries have brought the value of the euro lower.  

Stateside, housing starts improved in February, with overall home construction rising by 0.8%. Construction on single-family homes, which constitute the bulk of the data, improved by 0.5% to its highest adjusted rate since June 2008. Building permits for future construction also increased to their best level since June 2008. But the overall housing starts tally was not as high as expected, and concerns remain about homebuilders' sentiment.

The Dow was 0.2% lower, and the S&P 500 and the Nasdaq were down by 0.5%. 

Stocks on the Move
 Walgreen (WAG) announced that it has entered an agreement to receive its pharmaceutical products from  AmerisourceBergen (ABC) in exchange for a right to acquire a majority position in the latter firm.  Cardinal Health (CAH), which previously supplied to Walgreen, saw its shares fall 7% on the announcement. Walgreen also reported an 11% gain in second-quarter earnings, but revenue was flat and below Wall Street expectations. Walgreen shares were up by 5.5% at midday, and AmerisourceBergen shares were 6.7% higher. 

Athletic-apparel firm  Lululemon Athletica's (LULU) shares sank by 5.2% after the company issued a product recall for nearly 20% of pants from its stores. Quality-control matters were the supposedly the reasons behind the recall. 

 Boeing (BA) shares were up 0.3% after Ireland-based airline Ryanair Holdings (RYAAY) reportedly agreed to purchase 175 new Boeing next-generation 737-800 airplanes. At current list prices, the deal is valued between $15 billion and $16 billion. Ryanair's ADR shares were 2.5% higher at midday. 

Foreign Markets
Stocks in Asia were mixed as the Nikkei 225 gained 2.0%, while the Shanghai Composite was 0.8% higher. The Hang Seng was down by 0.2%. 

In Europe, the Paris CAC fell 1.2%, and the DAX lost 0.8%. The FTSE 100 was 0.3% lower.

Kevin O'Shaughnessy does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.