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Dismal quarterly results from technology major Oracle and investor concerns about the consequences of Cyprus’ financial crisis on the heath of the Euro Zone’s economy dragged benchmarks lower. Cyprus’ financial crisis overshadowed encouraging numbers from the housing sector. Existing home sales increased in the month of February. Meanwhile, initial claims surged slightly but the four-week moving average declined to its lowest level in five years. All ten sectors of the S&P 500 industry groups ended in the red and the materials sector emerged as the biggest loser.

The Dow Jones Industrial Average (DJI) lost 0.6% to close the day at 14,421.49. The S&P 500 fell 0.8% to finish yesterday’s trading session at 1,545.80. The tech-laden Nasdaq Composite Index declined 1.0% to end at 3,222.60. The fear-gauge CBOE Volatility Index (VIX) jumped 10.4% to settle at 13.99. Consolidated volumes on the New York Stock Exchange, American Stock Exchange and Nasdaq were roughly 5.9 billion shares, lower than 2012’s daily average of 6.45 billion shares. Declining stocks outnumbered the advancers. For the 33% that advanced, 64% declined.

Benchmarks opened lower on Thursday and languished in the red throughout the day. Stocks fell further in the late afternoon after rating agency Standard & Poor's reduced Cyprus’ sovereign credit rating to junk. On the other hand the country’s international lenders said to qualify for the international bailout Cyprus will have to raise the requisite loan amount till Monday. If Cyprus is unable to raise the billions of euros then the country’s financial system will crumble and could withdraw from the euro bloc.

According to the National Association of Realtors existing home sales increased in February. Existing home sales came in at 4.98 million in February from previous month’s upwardly revised figure of 4.94 million. This was slightly below the consensus estimate of 5.01 million. According to Lawrence Yun, NAR’s chief economist: “Job growth in the improving economy and pent-up demand are causing both home sales and rental leasing to rise. Though home prices are rising much faster than rents, historically low mortgage rates are still making home purchases affordable.”  

The U.S. Department of Labor said in a report that the number of Americans filing for unemployment benefits increased slightly in the previous week. According to the report, initial claims surged 2,000 from previous week’s revised figure of 334,000 to 336,000. This was slightly below the consensus estimate of 338,000. More importantly the four week moving average declined 7,500 to 339,750 from previous prior week’s revised figure of 347,250.

Another report was released on the domestic front, which revealed that U.S. economy is recovering. According to the Federal Reserve Bank of Philadelphia manufacturing activity surprisingly rebounded in March. The general economic index jumped to 2 from previous month’s figure of -12.5. 

Disappointing third quarter results from Oracle Corporation (NASDAQ:ORCL) also dampened investor sentiment. Oracle shares tanked 9.7% after the company reported its quarterly results. The company’s earnings and revenue both fell short of the Street’s estimate.

Dismal results from Oracle affected the technology sector yesterday. Stocks such as Microsoft Corporation (NASDAQ:MSFT), International Business Machines Corp. (NYSE:IBM), Hewlett-Packard Company (NYSE:HPQ) and Sony Corporation (NYSE:SNE) lost 0.7%, 1.3%, 2.6% and 2.3%, respectively.

The materials sector was the biggest loser among the S&P 500 industry groups and the Materials Select Sector SPDR (XLB) lost 1.7%. Stocks such as Alcoa Inc (NYSE:AA), The Dow Chemical Company (NYSE:DOW), E I Du Pont De Nemours And Co (NYSE:DD), Monsanto Company (NYSE:MON) and Eastman Chemical Company (NYSE:EMN) fell 1.1%, 2.9%, 1.0%, 2.0% and 3.7%, respectively.

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