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US stocks drop on Cyprus, weak earnings

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US stocks have closed lower on uncertainty over the Cyprus banking crisis and some surprisingly weak corporate earnings.

The Dow Jones Industrial Average lost 90.24 points (0.62 per cent) on Thursday to close at 14,421.49.

The broad-based S&P 500 dropped 12.91 (0.83 per cent) to 1,545.80, while the tech-rich Nasdaq Composite Index gave up 31.59 (0.97 per cent) to 3,222.60.

The retreat came after the European Central Bank said it would halt emergency funding to Cyprus banks unless the country reaches a bailout deal by Monday.

The Cyprus crisis has revived concerns about eurozone stability.

Markets were also troubled by a weak earnings report from technology company Oracle. That came a day after FedEx disappointed investors, announcing its quarterly earnings were hit by poor international results.

“The market caved in over corporate news and Cyprus,” said Peter Cardillo of Rockwell Global Capital.

Most of the blue-chip members of the Dow ended the day in the red. Trading was hard on banks like Bank of America and JP Morgan, both losing 1.6 per cent.

The Dow’s technology companies also lost on the day. Cisco gave up 3.8 per cent, IBM retreated 1.3 per cent and Hewlett-Packard dropped 2.6 per cent.

Oracle shares sank 9.7 per cent after its earnings missed analyst expectations. The results showed weak sales of software licences and cloud computing subscriptions.

Global package delivery giant FedEx dropped 2.7 per cent, one day after slashing its profit guidance for fiscal 2013.

Lululemon Athletica, which markets sports clothing for women, rose 1.3 per cent after it beat fiscal fourth-quarter earnings forecasts. The Canadian company estimated it lost $US12-$US17 million in revenue in the current quarter due to a recall of too-sheer yoga pants.

Homebuilder KB Home rose 2.5 per cent after reporting a big jump in revenues thanks to an increase in the number of homes delivered and a higher average selling price.

Bond prices declined. The yield on the 10-year Treasury rose to two per cent from 1.94 per cent late on Wednesday, while the 30-year jumped to 3.23 per cent from 3.17 per cent. Bond prices move inversely to yields.