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Market Update

U.S. Home Sales at 3-Year High, Stocks Fall on Cyprus Worries

Author: Nichole Harper
Last Update: 11:25 AM ET March 21 2013

11:20 AM New York Market indexes on Wall Street declined after a positive report on the housing market failed to overshadow growing uncertainties in the euro zone. Existing home sales and median home sale price increased in February.

Market indexes on Wall Street opened lower and quickly descended on the growing uncertainties in the euro zone.

Home sales in February reached to the highest levels in three years according to the data released by the National Association of Realtors.

Sales of existing homes increased 0.8% in February from January to 4.98 million annual rate after adjusting for seasonality. Sales rose 10.2% from a year ago month.

The industry group also said median home price increased in the month 11.6% to $173,600.

First-time home buyers, critical to sustain the market demand still trailed the needed 40% of total demand required in stable markets. First-time buyers made up only 30% of all buyers as bank lending remained tight.

Separately, government said weekly jobless claims applicants increased 2,000 to 336,000 in the week ending on March 16.

Conference Board said its index of the outlook for the next three to six months increased 0.5% for the second monthly increase in a row.

Across the euro zone market indexes turned lower after the European Central Bank set a deadline to finalize the bank bailout for Cyprus.

The central bank said it would cut off emergency lending on March 25 if Cyprus fails to agree on conditions laid out by international lenders.

According to a private survey, an index of manufacturing activities in Germany declined unexpectedly and an index of euro zone services and manufacturing output fell more than expected.

In London trading, FTSE 100 index dropped 1% or 62.4 to 6,370 and in Frankfurt the DAX index declined 1.4% to 111.5 to 7,891. In Paris, CAC 40 index slumped 1.6% or 62.6 to 3,767.

Stocks in Review

Cisco dropped 3% after analyst at FBR Capital Markets lowered his view on the largest maker of communication networking gear.

Guess Inc (GES) dropped 6.5% after the expensive jeans maker estimated annual revenues between $2.6 billion and $2.64 billion.

Oracle (ORCL) plunged 9% after the database developer confirmed that sales trailed expectations as companies transition to cloud computing and acquired less hardware and software.

Sources: Data collected by 123jump.com and Ticker.com from company press releases, filings and corporate websites. Market data: BATS Exchange. Inc