Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Cyprus Takes the Markets on a Wild Ride

Stock markets have gone on a wild ride today, with the Dow Jones Industrial Average (DJINDICES: ^DJI  ) swinging 132 points from this morning's peak to a midday low. The Dow has since leveled off, down a fraction of a point as of 3:20 p.m. EDT, while the S&P 500 (SNPINDEX: ^GSPC  ) remains down 0.42%.

The most recent news about the bailout in Cyprus is that the government rejected a tax on bank deposits, which puts the entire bailout into question. The country's banks are closed until Thursday, so there's still time to resolve the issue, but we shouldn't be shocked if there's a run on the banks in the event a deposit tax isn't implemented by then.

Caterpillar (NYSE: CAT  ) and Alcoa (NYSE: AA  ) are leading the decliners on the Dow, falling 1.6% and 1.3%, respectively. These two infrastructure companies could be adversely affected if the problems in Cyprus spread to the broader European economy. Spain, Greece, and Italy are still dealing with their own financial problems, and if Cyprus rejects a bailout or the deposit tax is met with fear by investors and depositors (which is likely), it could put their situations into question. Cyprus won't bring the European Union down, but a larger country could, and that would be terrible for companies that need a healthy economy to drive demand.

When there's fear about the overall economy, investors flee to consumer staples. That's driving Coca-Cola (NYSE: KO  ) and Procter & Gamble 1.5% and 1.2% higher, respectively, late in the trading session. There's nothing specific driving these stocks besides a flight to high-quality names. Coca-Cola, in particular, has weathered many economic storms, so a little trouble in Cyprus is old hat for the soda giant.

Coca-Cola's wide moat has helped provide its shareholders with superior gains in the past, but the company faces some new threats to its continued market dominance. The Motley Fool recently compiled a premium research report containing everything you need to know about Coca-Cola. If you own or are considering buying shares in the company, you'll want to click here now and get started!

Read/Post Comments (0) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2321150, ~/Articles/ArticleHandler.aspx, 9/30/2016 6:17:47 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 9 hours ago Sponsored by:
DOW 18,143.45 -195.79 -1.07%
S&P 500 2,151.13 -20.24 -0.93%
NASD 5,269.15 -49.39 -0.93%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/29/2016 4:35 PM
^DJI $18143.45 Down -195.79 -1.07%
^GSPC $2151.13 Down -20.24 -0.93%
S&P 500 INDEX CAPS Rating: No stars
AA $9.96 Up +0.08 +0.81%
Alcoa CAPS Rating: ***
CAT $87.47 Up +0.88 +1.02%
Caterpillar CAPS Rating: ***
KO $42.03 Down -0.12 -0.28%
Coca-Cola CAPS Rating: ****