Stocks fell on Monday, retreating after the S&P 500 had risen to within a quarter point of hitting a new record high.
The bencmark U.S. index closed at 1,551.69, down 5.20 points or 0.3 per cent – after rising as high as 1,564.91 soon after trading began. Its record-high close, in 2007, was 1,565.15.
The blue-chip Dow Jones industrial average closed at 14,447.75, down 64.28 points or 0.4 per cent, surrending about 117 points from its earlier high. In Canada, the S&P/TSX composite index closed at 12,680.71, down 76.64 points or 0.6 per cent.
The reversals 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. In return, Cyprus agreed to shut down its second largest bank and tax uninsured depositors.
The bailout agreement was highly unusual, but investors only grew nervous when the Dutch finance minister suggested that it could be used elsewhere in the euro zone as a template for bailouts – stirring concerns about potential bank-runs in other counties.
Among European stocks, Germany's DAX index fell 0.5 per cent and the U.K.'s FTSE 100 fell 0.2 per cent, also marking a reversal from earlier levels.
Among U.S. stocks, Dell Inc. rose 2.6 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.
Research In Motion Ltd. fell 4.5 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.
David Berman