A Cyprus surprise sent global markets down sharply today, but U.S. indexes managed to close off their lows. The Dow fell 0.4% to 14,452. Stocks around the globe reacted to news that the tiny Mediterranean nation could impose a levy on all bank deposits. Under the initial plan, accounts holding over 100,000 euros would face a one-time tax of 9.9%. All other deposits would be subject to a 6.75% tax. The money would be used to fund a bailout of the country as part of the Euro Zone debt crisis. Debate and a vote in Cyprus's parliament was postponed until Tuesday and the country's banks will be closed until Thursday.
Meanwhile, U.S. banks were under pressure. JPMorgan (JPM) fell 1%, extending losses which began last Friday. That's when the Fed said JPM showed weaknesses in the second round of stress tests. There were also Senate hearings on the London Whale trading scandal and accusations that bank executives weren't forthcoming with information. Up until last week, the stock had climbed about 60% since the summer.
Shares of J.C. Penney (JCP) soared over 6% today on two separate pieces of news regarding the beleaguered retailer. First, Brian Nagel, an analyst at Oppenheimer says he visited several stores over the weekend where JCP just opened Joe Fresh mini stores. Nagel says he was impressed by what he saw. Separately, an analyst at ISI Group says the struggling retailer could convert its top 300 locations into a real estate investment trust.
Aeropostale (ARO) is getting back in fashion with investors. Shares were up more than 3% today following a report from Bloomberg saying the company is at a price right now where a private equity firm is likely to swoop in. The stock fell 5% last Friday, leaving it valued at just .46 times its revenue over the last year. Bloomberg says that makes Aeropostale the cheapest among similar-sized clothing chains. Aeropostale currently earns less in profits for each dollar of sales than its peers, so an outside investor might think there's room for improvement. Right now the company has no debt.
UTStarcom (UTSI), one of the few companies to report earnings today, saw its share prices tumble 16%. UTStarcom integrates things like cable and internet services. The company is based in Beijing and focused on China. It reported revenues fell 13% from the same period last year. Gross profit was $13.7 million, or 31.7% of net sales.