Dow Moves Higher Ahead of Cyprus Deadline
U.S. and European stock markets have brushed off the growing risks in Cyprus and potential run on banks in the eurozone today, pushing the Dow Jones Industrial Average 0.54% higher and the S&P 500 0.58% higher as of 3:15 p.m. EDT.
The European Central Bank has threatened to pull a liquidity lifeline to Cyprus if a bailout isn't agreed to by Monday. The country is in negotiations with European officials, but it's asking for a tax on bank deposits that has been rejected, and the only other possibility right now is help from Russia, which seems unlikely to come. If Cyprus doesn't reach a deal, the worst-case scenario would be a run on banks in troubled countries like Italy and Spain, which would hurt all of Europe. But all of those worries have been swept under the rug today.
Hewlett-Packard is the biggest winner on the day, rising 2.4%. The company raised its dividend 10% to $0.1452 per share, which is a 2.5% annual yield for investors. This is another sign the company is back on track, and investors have a lot of upside if HP can start growing again.
UnitedHealth Group is the big loser on the Dow, falling 1.2% today. The Wall Street Journal ran an article suggesting that health insurers are warning brokers that premiums may go way up next year. Companies are preparing to report premiums to regulators for 2014 in the next few months and provisions in Obamacare may lead to an increase in costs for some. The law is a double-edged sword for insurers, bringing more people into the system, but if costs go up it will be easier for consumers to shop for competitive plans. Today, that has investors on edge.
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Fool contributor Travis Hoium has no position in any stocks mentioned. The Motley Fool recommends UnitedHealth Group. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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