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The Dow Takes Another Mediterranean Vacation

Jeremy Bowman
March 18, 2013

Well, if you thought that every country in Europe had already had its chance to spoil the markets at least one day, you were wrong. Today, tiny Cyprus stole the headlines following the IMF's decision to bail it out over the weekend, sending stocks down around the world, and the Dow Jones Industrial Average (INDEX: ^DJI) south 62 points, or 0.4%.

The key issue in the bailout and the one roiling markets was a plan to tax deposits held in the small Mediterranean nation, often seen as a safe haven for European investors, and especially popular with Russians, similar to the Cayman Islands for Americans. Those holding bank deposits in Cyprus could lose up to 10% of their savings, and the decision seems to threaten the security of depositors elsewhere on the continent, though European officials insist this is a one-off solution. Parliament will vote on the bailout tomorrow. For more on the issue, see my colleague Morgan Housel's take on the matter.

Despite today's general downswing, Hewlett-Packard (NYSE: HPQ) gained 2.9% on the day after Morgan Stanley Managing Director Katy Huberty said she expects HP to beat 2013 free-cash-flow estimates and upgraded the stock to "overweight." Huberty noted that the tech giant delivered FCF of $2.1 billion in its latest quarter and expects the PC maker to finish the year with $6.7 billion, rather than the $5 billion it had guided for. HP shares have now doubled since hitting bottom four months ago, following the Autonomy debacle. Huberty also noted improvements in cost structure, the brand, and employee morale.

Verizon (NYSE: VZ) shares also mov