The Dow Jones Industrial Average (DJINDICES:^DJI) ended its 10-day winning streak last Friday, when the index closed lower. Today, the Dow continued its losing streak when the closing bell rang and the big board was lower by 62 points. The blue-chip average now sits at 14,452.
Today's decline was a direct response to the situation in Cyprus. As part of an EU bailout, the small country had to agree to tax the deposit accounts of its citizens. All of the banks within its borders will remain closed until Thursday, as many fear a high possibility of bank runs. Others throughout Europe fear that if this tax is imposed in Cyprus, the whole European banking system may be in jeopardy as banking customers throughout the region, anticipating similar taxes, close their accounts. To learn more details about this unprecedented bailout, click here.
While the Dow's financial stocks all moved lower on the news, 22 of the index's 30 components closed lower this afternoon.
Top Dow losers
The Dow's big technology stocks fell after a report indicating that IT service contracts fell in Q4 of 2012. Ovum, an information technology research firm, said global IT players such as IBM (NYSE:IBM) and Cisco (NASDAQ:CSCO) struggled through a gloomy end to 2012. While Q4 2012 IT sales were below those of 2011, 2012 full-year sales fell to their lowest level since 2001.
Considering sales were off this past year, and IBM stock fell by 0.8%, and Cisco's dropped 1.16% today alone, both companies have experienced decent stock performance over the past few months. Shares of IBM are up 11.31%, while Cisco has risen 10.28%, in line with the Dow's performance of 10.29%, year to date.
In a surprising twist, shares of Walt Disney (NYSE:DIS) fell by 1.3% this afternoon. Weekend box-office sales indicate that Disney's Oz: The Great and Powerful took the No. 1 spot both in the U.S. and worldwide. Since its release just two weeks ago, Oz has brought in $281 million, of which Disney takes about half, while the other half goes to the individual theaters.
Meanwhile, a judge in Missouri approved a $220 million settlement for consumers of the painkiller Vioxx, made by Merck (NYSE:MRK). Back in November, the drug manufacturer settled a lawsuit the night before it went to trial, but a judge needed to review and approve the settlement before it could take effect.
News of the settlement is probably what caused shares of Merck fell by 1.04% today. In the past, eight other class action lawsuits were bought against Merck pertaining to Vioxx, and all of them failed to recover any damages. Since the plaintiffs were successful this time, it may have opened the door for future lawsuits.