DJI - NEW YORK, March 18 (Reuters) - U.S.
stocks fell on Monday after a plan to tax bank accounts in Cyprus to help pay
for the country's bailout stoked worries that it could threaten the stability
of financial institutions in the euro zone.
The move pushed the S&P 500
farther from its 2007 record closing high of 1,565.15 after the index came
within striking distance of the level last week.
Financial stocks led the day's decline,
with the S&P 500 financial index down 1 percent, following a steep slide in European bank shares. JPMorgan Chase
fell 1 percent to $49.51.
Cypriot ministers were trying to
revise a plan to seize money from bank deposits before a parliamentary vote on
Tuesday that will secure the island's financial rescue or could lead to its
default.
European officials have said the
measure is a one-off for a country that accounts for just 0.2 percent of
European output. The fear is that savers in larger European countries will
become nervous and start withdrawing funds, although there was no immediate
sign of that on Monday.
"There are worries about
whether there will be any spillover from the Cyprus situation," said Nick
Sargen, chief investment officer at Fort Washington Investment Advisors in
Cincinnati, which oversees more than $45 billion.
"Will authorities be able to
convince markets that this proposal is only for this unique situation, for such
a small country where the banking system is more of a tax shelter? If they
can’t, that might cause new concerns about Europe’s banking system."
The Dow Jones industrial average slipped 62.05 points, or 0.43 percent, to 14,452.06 at the close. The Standard
& Poor's 500 Index shed 8.60 points, or 0.55 percent, to
1,552.10. The Nasdaq Composite Index dropped 11.48 points, or 0.35 percent, to close at 3,237.59.
Brent and Crude Oils - NEW YORK, March 18 (Reuters) - Brent
crude oil slipped to near $109 a barrel on Monday after touching a three-month
low, as a plan to tax bank accounts in debt-laden Cyprus sparked fears of
further turmoil in the euro zone.
Prices fell as low as $107.78 a
barrel in early trade, a level last hit in mid-December, but recovered after
stronger employment data in the United States bolstered the outlook for energy
demand.
Saudi Arabia's top oil official also
said the current price won't hurt the economy, indicating the world's largest
crude exporter sees little need to add additional supplies.
Brent crude settled down 31 cents at $109.51 per barrel after trading between $107.78 and
$109.83 during the session.
U.S. oil fell to a low of $91.76 a barrel before reversing losses, settling 29 cents
higher at $93.74 a barrel.
Oil markets will remain volatile for
the next few days as investors watch for any spillover of the developments in
Cyprus to other euro zone nations, analysts said.
Cypriot ministers were trying to
revise a plan to seize money from bank deposits before a parliamentary vote on
Tuesday that will secure the island's financial rescue or could lead to its
default, with reverberations across the euro zone.
"Although Cyprus is small,
there was some concern that it was being made a test case for policy,"
said Tim Evans at Citi Futures Perspective in New York.
"The strong initial reaction
has policy makers backpedaling from the deposit tax idea, but it may be hard
for markets to forget the risk."
Gold rose to a two-week high above
$1,600 an ounce and the U.S. dollar firmed as investors sought out safer
assets. A stronger U.S. currency can weaken dollar-priced commodities like oil
as they become more expensive for overseas buyers.
LOSSES STEMMED
Further losses in oil were stopped
by expectations of a stronger economy in the United States, the world's largest
oil consumer, and comments from Saudi Arabia's top energy official that oil
prices near current levels won't hurt demand.
Almost all U.S. states began 2013
with lower unemployment rates than they had at the start of 2012, according to
Labor Department data.
Saudi Arabian oil minister Ali
al-Naimi said current oil prices will have no impact on growth in Asia. The
region's biggest economies, including China, have struggled with rising energy
costs in their efforts to boost growth.
Worries of an escalation in a
standoff between the West and Iran over Tehran's disputed nuclear program could
also help ensure prices do not fall much further. Concerns of supply disruption
from the Middle East have kept Brent largely above $100 a barrel since early
2011.
In Libya, armed clashes broke out at
an oil field belonging to Libya's Waha Oil on Monday, where protesters seeking
jobs had been blocking the site entrance for the last eight days.
CBOT Soybean - Soybean futures on the Chicago Board of Trade fell for a
fifth straight session on Monday, hitting a one-month low as export demand for
U.S. soybeans slowed and the South American soy harvest expanded, traders said.
* Additional pressure spread across the commodities sector after
an unusual bank bailout proposal for Cyprus threatened fresh euro zone turmoil,
pushing traders to dump commodities and buy gold as a hedge.
·
USDA
reported export inspections of U.S. soybeans in the latest week at 8.927
million bushels, below a range of trade expectations for 13 million to 27
million bushels.
·
Long
liquidation noted ahead of USDA's prospective plantings
and quarterly stocks reports on March 28.
·
Soybean
spot basis bids fell as much as 10 cents per bushel at
processing plants around the U.S. Midwest early on Monday
amid poor profit margins and a slowdown in the soybean crush, dealers
said.
·
Freezing
temperatures hit southern Buenos Aires over the weekend
and may have hurt some late-planted soybeans, but the extent of
damage will not be known for a week or so, a local forecaster
said.
BMD CPO - SINGAPORE, March 18 (Reuters) - Malaysian
palm oil futures edged lower on Monday, as traders turned cautious after a
radical bailout proposal for Cyprus rattled investors and triggered a
broad-based decline in commodities and financial markets.
Euro zone finance ministers asked
Cyprus savers to forfeit a portion of their deposits in return for a 10 billion
euro ($13 billion) bailout for the island, sparking fears of fresh turmoil in
the euro zone and worries about global demand.
"It seems like Europe is back
to the headlines for the wrong reasons," said Ker Chung Yang, investment
analyst with Phillip Futures in Singapore. "We have probably seen the last
of the rally last week, and this week could be the beginning of a downturn or
corrections in the commodities market."
The benchmark June contract on the Bursa Malaysia Derivatives Exchange fell 1.4 percent to close at 2,383
ringgit ($761) per tonne, also its low for the day. Prices traded in a tight
range between 2,383 to 2,415 ringgit.
Total traded volume stood at 27,137
lots of 25 tonnes each, slightly higher than the usual 25,000 lots.
Palm oil futures also continued to
come under pressure from a weak soy market, which is suffering from poor U.S.
demand and higher South American supply, losing 1.4 percent last week.
But seasonally lower output in
Malaysia may help ease palm oil stocks and support prices, especially after
cargo surveyor data on Friday showed firm export demand.
Malaysian palm oil shipments for the
first half of the month were slightly better compared to the same period last
month, with cargo surveyors Intertek Testing Services and Societe Generale de
Surveillance reporting a 0.2 and 4.6 percent increase respectively.
In other markets, crude oil dropped
to below $109 a barrel on Monday as stock markets tumbled and the dollar
strengthened on the bank bailout proposal for Cyprus.
In other vegetable oil markets, U.S.
soyoil for May delivery lost 0.8 percent in late Asian trade. The
most-active September soybean oil contract on the Dalian Commodities Exchange also dropped 0.4 percent.
Regional Equities - March 18 (Reuters) - Southeast Asian
stocks ended weaker on Monday, following Asian peers as nervous investors
shifted to safer heavens after a radical bailout plan for Cyprus dented the
appetite for risky assets globally.
Cyprus and international lenders
agreed at the weekend that savers in the island's outsized banking system would
take a hit in return for the offer of $13.07 billion in aid, breaking with the
earlier European Union practice that depositors' savings were sacrosanct and
raising fears it could set a precedent for future euro zone bail outs.
The Philippine lost 1.8 percent to a near five-week low of 6,536.18 with a 4.3 percent loss in
SM Investment Corp
Thailand fell 0.4 percent to 1,591.65 from a 19-year high of 1,598.13 hit in the
previous session, led by a 2 percent fall in PTT Global Chemical Pcl (PTTGC)
Malaysia ,
the region's worst performer so far this year, fell 0.4 percent to a near
four-week low of 1,621.36. Kuala Lumpur has seen the highest foreign inflow in
the region, data showed on Monday.
Indonesia ,
the region's best performer in terms of foreign inflows, fell 0.3 percent to
4,802.83.
Jakarta-based analysts said concerns
over the Cyprus bailout and a weak regional market, along with high domestic
inflation dragged the market down.
Vietnam ,
the region's best performer and the smallest bourse, edged down 0.5 percent,
while Singapore fell 0.9 percent to a near two-week low.
