U.S. stocks joined the global selloff Monday as investors fretted over the European Union's proposed terms for a $13 billion bailout for the island nation of Cyprus.
Over the weekend, officials including representatives from the International Monetary Fund, the European Central Bank and euro-zone finance ministers reached agreement over a bailout plan for Cyprus that would see a tax of up to 10% levied on bank deposits held by savers on the Mediterranean island.
The proposal, which has infuriated Cypriots and heightened fears for Europe's fragile economies, is scheduled to be put to a vote in parliament Tuesday. The vote was set for Monday but was postponed to give the government time to try to amend the deal.
Markets across Europe were lower Monday. In Germany, the DAX 30 dropped 1.12%. Britain's FTSE 100 index dipped 0.65%. And in France, the CAC-40 lost 1.31%.
In Asia, Japan's Nikkei 225 index slid 2.7% to 12,220.63. Hong Kong's Hang Seng dropped 2.07% to 22,067.59. South Korea's Kospi shed 0.92% to 1,968.18. Benchmarks in Australia, Singapore, Taiwan, mainland China and the Philippines also fell.
Benchmark oil for April delivery was down 95 cents to $92.50 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 42 cents to finish at $93.45 per barrel on the Nymex on Friday.
In currencies, the euro fell to $1.2894 from $1.3083 late Friday in New York. The dollar fell to 94.74 yen from 95.60 yen.
On Friday, U.S. stocks fell, ending a 10-day winning streak for the Dow Jones industrial average, its longest in nearly 17 years. The Dow dropped 0.2% to 14,514.11. The S&P 500 lost 0.2% to 1,560.70. The Nasdaq composite index dropped 0.3% to 3,249.07.
The Cypriot bailout follows those for Greece, Portugal, Ireland and Spanish banks, but the terms are unprecedented in that it is the first one that would dip into people's savings. Early Monday, The Wall Street Journal reported that Cyprus was preparing a counter-proposal that would more evenly distribute tax liabilities as part of the bailout.
By Kim Hjelmgaard