North American stocks were down in midday trading on Monday, after surrendering early gains when a European official said that the Cyprus bailout agreement should be seen as a template for the rest of Europe.
The S&P 500 was down 3 points or 0.2 per cent, to 1554 – marking a dramatic reversal after the benchmark index came within a quarter point of topping its record-high close in 2007. The blue-chip Dow Jones industrial average was down 38 points or 0.3 per cent, to 14,474. In Canada, the S&P/TSX composite index was down 42 points or 0.3 per cent, to 12,716.
The moves came as a surprise. Most major indexes showed gains in early trading as investors welcomed the last-minute bailout deal over the weekend, which provided Cyprus with €10-billion in financial aid. Cyprus agreed to shut down its second largest bank and tax uninsured depositors.
The bailout agreement was highly unusual, but investors grew nervous when the European official suggested that it could be used elsewhere in the euro zone.
Among European stocks, Germany’s DAX index was down 0.5 per cent and the U.K.’s FTSE 100 was down 0.3 per cent in late afternoon trading.
Within the S&P 500, industrials fell 0.7 per cent, health-care stocks and consumer discretionary stocks fell 0.2 per cent each, and financials fell 0.1 per cent. Consumer staples and telecom stocks showed slight gains.
Dell Inc. rose 3 per cent after the company announced that Blackstone Group and investor Carl Icahn have submitted proposals to buy the computer maker. The news has rekindled hopes for a bidding war, as founder Michael Dell and a private equity firm had been hoping to take the company private in a $24.4-billion (U.S.) offer to shareholders.
Within Canada, materials fell 0.5 per cent, energy stocks fell 0.4 per cent and financials fell 0.1 per cent.
Research In Motion Ltd. fell 4.3 per cent after an analyst at Goldman Sachs removed the stock from its “buy list” and downgraded its recommendation to “neutral” – arguing that RIM’s U.S. launch of its Z10 smartphone was disappointing. Goldman Sachs now believes RIM’s chances of success with the Z10 is just 20 per cent.