WASHINGTON (dpa-AFX) - Wall Street seems to anxiously await the developments on a Cypriot bailout. With the parliamentary vote on the bank tax proposal postponed and the bank holiday in Cyprus extended until Wednesday, traders in Asia regained some composure. Stocks in the region closed mixed, while European stocks are seeing weakness. Traders may also react to a domestic report on housing starts due before the markets open. Additionally, traders may prefer to adopt a cautious stance ahead of the Fed announcement on Wednesday following the conclusion of a 2-day FOMC meeting beginning today.
As of 6:15 pm ET, the Dow futures are moving down 13 points, while the S&P 500 futures are down 0.50 points and the Nasdaq 100 futures are declining 1.75 points.
U.S. stocks extended their declines on Monday, as the developments in Cyprus provided a reason for traders to take profits in the overbought markets.
On the economic front, the 2-day FOMC meeting gets underway, with the post-meeting policy statement due to be released at 2 pm ET on Wednesday.
The Commerce Department is scheduled to release its housing starts report at 8:30 am ET. Economists expect housing starts to come in at a seasonally adjusted annual rate of 919,000 units in February, up from 890,000 in the previous month. Building permits are expected to remain unchanged at 925,000 units.
In corporate news, Steel Dynamics (STLD) said it expects first quarter earnings of 17-21 cents per share compared to 20 cents per share in the year-ago quarter. The company also said it expects first quarter overall steel shipments to be fairly flat with the previous quarter.
Electronic Arts (ERTS) announced that its CEO John Riccitiello will step down, effective March 30th. The company also said it expects earnings and revenues for the current quarter to be at the low end of, or slightly below its previous guidance issued on January 30th.
The Asian markets ended mixed, with the Australian, Indian and Hong Kong markets closing lower, while the rest of the major markets advanced. The breather that Cypriot banking crisis got due to the postponement of the parliamentary vote served to bring some of the subdued risk appetite to the fore, although caution remained the undercurrent.
Japan's Nikkei 225 average rebounded strongly, as the yen weakened. The Nikkei 225 average opened higher and moved sideways for the rest of the session before closing up 247.60 points or 2.03 percent. The market witnessed broad based strength, with Taiyo Yuden leading the gains with an over 8 percent rally. Sumco, Sony, Sumitomo Mitsui Trust and Alps Electric all jumped solidly in the session, while some real estate stocks retreated on profit taking.
After opening higher and seeing further upside in early trading, Australia's All Ordinaries moved roughly sideways till the mid-session. The index declined steadily thereafter, dropping below the unchanged line in late trading and closing 23 points or 0.46 percent lower at 5,004. Most sector stocks moved to the downside, with consumer staple and healthcare stocks serving as the biggest drags.
Hong Kong's Hang Seng Index closed at 22,043, down 40.68 points or 0.18 percent. India's Sensex fell over 1 percent after the Reserve Bank of India opted to cut the repo rate by 25 basis points to 7.50 percent. The reverse repo rate was also lowered by the same magnitude to 6.50 percent. At the same time, the cash reserve ratio was retained at 4 percent. Meanwhile, the central bank cautioned that headroom for further easing remains limited despite the prevalence of growth risks.
Meanwhile, the minutes of the Reserve Bank of Australia's March meeting showed that the central bank has more leeway to lower rates further. At the meeting, the bank left its unofficial cash rate unchanged at 3 percent.
European stocks are extending their slide and are currently moderately lower despite the postponement of the Cypriot parliamentary vote. In response to the turmoil that erupted in Cyprus in response to the proposed taxation of depositors, eurozone finance ministers agreed that smaller depositors should be given more protection, signaling some flexibility on the proposed bank tax. At the same time, the ministers maintained that the nation should still raise 5.8 billion euros from the bank tax it has proposed. The parliament of Cyprus is set to vote on the bailout proposals later today.
In corporate news, U.K. retailer Sainsbury reported a 3.6 percent increase in its like-for-like sales, excluding fuel, for the ten weeks to March 16th. The like-for-like sales growth was ahead of expectations. U.K. chipmaker ARM Holdings announced the appointment of its president Simon Segars as its next CEO following the decision by the incumbent Warren East to retire, effective July 1st. Cairn Energy reported a narrower pre-tax loss for 2012.
In economic news, German economic sentiment improved unexpectedly in March, hitting its highest level since April 2010, the latest ZEW survey results showed. The economic confidence index rose to 48.5 in the month from 48.2 in the previous month. Economists had expected the confidence index to ease to 48.1 in the month.
Separately, U.K. consumer price inflation (CPI) rose to 2.8 percent in February, the fastest pace in nine months, driven by higher energy prices, official figures from the Office for National Statistics (ONS) revealed. The producer price inflation came in at 3.2 percent in the month, blowing past expectations for a 1.9 percent increase.
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