Cyprus crisis weighs down U.S. markets

Trader Leon Montana works on the floor of Trader Leon Montana works on the floor of the New York Stock Exchange Friday. On March 18, trading was extremely choppy, particularly in Europe, as investors fretted over an agreement between cash-strapped Cyprus and international lenders to seize deposits in the country's banks. (March 15, 2013) Photo Credit: AP

advertisement | advertise on newsday

The latest twists in Europe's debt drama weighed down the stock market Tuesday, offsetting more good news on the U.S. housing market.

The Dow Jones industrial average managed a slight gain while other indexes closed down. Investors were focused on Cyprus, where that country's lawmakers voted against a proposed bailout plan for banks.

"The concern in the market is that they could default or they could be forced out of the eurozone and that would create a precedent," said Alec Young, a global equity strategist with S&P Capital IQ. "The selling, though, is fairly contained, and that tells you most people think there will be some kind of compromise reached."

The Dow and other U.S. indexes started higher following a report of a surprisingly large increase in new home construction in February. U.S. builders started more houses and apartments in February and obtained permits for future construction at the fastest pace in 4 ½ years. The increases point to a housing recovery that is gaining strength.

The Dow gained as much as 62 points in morning trading on that news, but closed up just 3.76 points at 14,455.82.

The Standard & Poor's 500 index fell 0.24 percent to 1,548.34. The Nasdaq composite index fell 0.26 percent to 3,229.10.

You also may be interested in: