It has taken all week for Wall Street to care about what's happening in Cyprus, but today stocks have plunged as traders try to decipher how the mess in Cyprus will play out. The European Central Bank has given Cyprus until Monday to raise $7.5 billion, which may come from bank deposits, pension funds, or other assets in the struggling country. If Cyprus defaults or leaves the eurozone, it wouldn't be devastating in and of itself, but it could stoke fears that Spain or Italy would do the same.
The Dow Jones Industrial Average (DJINDICES: ^DJI ) has fallen 0.53% near the end of trading, while the S&P 500 (SNPINDEX: ^GSPC ) is down 0.71%, as investors realize what a big risk the tiny island nation really poses.
Cisco Systems (NASDAQ: CSCO ) is the biggest loser on the Dow, falling 4.1% after FBR Capital Marts analyst Scott Thompson downgraded the stock to underperform and slapped a price target of $17 on it. That's a low price for a stock that trades at 9.9 times forward earnings, yields 2.6%, and has a boatload of cash.
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It shouldn't be any surprise that Bank of America (NYSE: BAC ) and JPMorgan Chase are both down 1.4% after Cyprus didn't receive a bailout today. Banks this big have global connections, and while Cyprus may not bring them to their knees, problems in Italy or Spain could.
Verizon (NYSE: VZ ) is one of just four Dow stocks moving higher today, gaining 0.4%. Today the company launched 4G LTE networks in Athens, Ohio, and Presque Isle, Maine, adding to its huge lead over wireless competitors.
Don't be surprised if markets move lower again tomorrow as fear about European debt creeps back into the market. Cyprus and the EU have both held their ground so far, and it will likely take until Monday to figure out a bailout -- if they complete one at all.