USA TODAY - U.S. stocks joined a global sell-off Monday as investors fretted over the European Union's proposed terms for a$13 billion bailout for the island nation of Cyprus.
At the open in New York, the Dow Jones industrial average, Standard & Poor's 500 index and Nasdaq composite index all fell sharply, but most of the losses were erased within an hour.
The yield on the 10-year U.S. Treasury note is at 1.95%, down from 2.05% late last week, suggesting that investors are seeking the safe haven of government bonds. Bond yields fall when prices rise.
The price of gold, considered another safe haven in times of market volatility, jumped 1% to $1,606 before trimming its gains.
Over the weekend, officials including representatives from the International Monetary Fund, the European Central Bank and euro zone finance ministers reached agreement over a bailout plan for Cyprus that would see a tax of up to 10% levied on bank deposits held by savers on the Mediterranean island.
On Tuesday, Parliament is scheduled to vote on the proposal, which has infuriated Cypriots and heightened fears for Europe's fragile economies. The vote initially had been set for Monday but was postponed to give the government time to try to amend the terms of the proposal.
Markets across Europe were lower Monday. In Germany, the DAX 30 dropped 1%. Britain's FTSE 100 index dipped 0.6%. And in France, the CAC-40 lost 1%.
In Asia, Japan's Nikkei 225 index slid 2.7% to 12,220.63. Hong Kong's Hang Seng dropped 2.1% to 22,067.59. South Korea's Kospi shed 0.9% to 1,968.18. Benchmarks in Australia, Singapore, Taiwan, mainland China and the Philippines also fell.
Benchmark oil for April delivery was down 1.2% to just over $92 a barrel in electronic trading on the New York Mercantile Exchange.
In currencies, the euro fell to $1.2963 from $1.3083 late Friday in New York. The dollar fell to 95.08 yen from 95.60 yen.
The Cypriot bailout follows those for Greece, Portugal, Ireland and Spanish banks, but the terms are unprecedented in that it is the first one that would dip into people's savings. Early Monday, The Wall Street Journal reported that Cyprus was preparing a counter-proposal that would more evenly distribute tax liabilities as part of the bailout.
On Friday, U.S. stocks fell, ending a 10-day winning streak for the Dow Jones industrial average, its longest in nearly 17 years. The Dow dropped 0.2% to 14,514.11. The S&P 500 lost 0.2% to 1,560.70. The Nasdaq composite index dropped 0.3% to 3,249.07.
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