Weak Oracle sales depress markets

Posted: March 22, 2013

Stocks closed lower Thursday after Oracle's weak sales results weighed down big U.S. technology companies. Traders also worried that Cyprus might run out of time to avoid bankruptcy.

The Dow dropped 90.24 points, or 0.6 percent, to close at 14,421.49. Cisco was the Dow's biggest loser, followed by Hewlett-Packard. IBM also lost ground.

The S&P 500 closed down 12.91 points, falling 0.8 percent to 1,545.80. Oracle had the biggest decline among companies in the index; Juniper Networks also fell steeply.

The Nasdaq, weighted heavily toward tech stocks, fell a full percentage point, closing down 31.59 points, at 3,222.60.

Oracle reported an unexpected decline in sales in its fiscal third quarter. The company's results have an outsize impact on technology stocks because it reports earlier than most of its peers.

European markets closed sharply lower Thursday. The main indexes in Paris and Frankfurt fell 1.4 percent and 0.9 percent on fear that the crisis in Cyprus would intensify. The European Central Bank has threatened to end emergency support of Cyprus' banks next week unless leaders can raise about $7.5 billion in the next four days to avoid bankruptcy.

If the Mediterranean banking haven is unable to secure a bailout, its banks will fail and it could be forced to leave the 17-member eurozone.

"It's amazing how quickly things can turn back to Cyprus and Europe," said Oliver Cross of Carolinas Investment Consulting L.L.C. in Charlotte, N.C. Cross spent his day focused on headlines from Europe rather than digesting happier news about U.S. hiring and home sales.

The U.S. jobs and housing markets continue to improve gradually, according to economic reports released Thursday morning. The Labor Department said the number of people claiming new unemployment benefits last week was roughly flat, near a five-year low.

Sales of previously owned homes rose in February to a three-year high, according to the National Association of Realtors.

In the tumbling tech sector, Oracle fell $3.47, or 9.7 percent, to $32.30. Juniper dropped 42 cents, or 2.2 percent, to $18.89. Cisco lost 83 cents, or 3.8 percent, to $20.84. H-P declined 60 cents, or 2.6 percent, to $22.32. And IBM declined $2.80, or 1.3 percent, to $212.26.

The publisher Scholastic plunged after shrinking demand for its best-selling Hunger Games books forced it to cut its guidance for the year. The company's fiscal third-quarter loss nearly doubled. Shares fell $4.32, or 13.9 percent, to $26.75.

Movado Group dropped after the luxury watchmaker said its fiscal fourth-quarter net income fell 26 percent. The stock lost $3.89, or 10.5 percent, to close at $33.23.

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