March 19 - Wall Street ends little changed as investors ponder if Cyprus is spiraling towards bankruptcy after rejecting a planned European Union-imposed bank tax on depositors. Conway G. Gittens reports.
It's the vote that was watched closely on Wall Street and by investors around the world. Lawmakers in Cyprus overwhelmingly rejected a proposed tax on bank deposits as part of a euro zone bailout. A stunning move in the life of the Euro zone after the bloc was able to push unfavorable austerity measures on larger members like Greece, Portugal, Ireland, Spain and Italy. Cyprus Socialist Party lawmaker Nikos Nikolaidis: SOUNDBITE: SOCIALIST PARTY MEMBER OF PARLIAMENT NIKOS NIKOLAIDIS (ENGLISH) SAYING: "We firmly believe that there are alternatives and that alternatives should be found." And on the streets of Nicosia - taxi driver Dino Constantinou had a warning for fellow euro zone citizens. SOUNDBITE: DINOS CONSTANTINOU, TAXI DRIVER (ENGLISH) SAYING: "I want to send a message to all the citizens of the European Union: what has happened to Cyprus now is just the beginning and a test. They will follow - all the other European countries - Spain, Portugal, Italy and so on." The European Central Bank, in an effort to prevent a new chapter from opening up in Europe's long-running financial crisis, vowed to provide the capital needed to keep financial markets operating smoothly and says it will discuss the Cyprus rejection with the International Monetary Fund along with other EU partners. Global investors wonder if Cyprus can avoid bankruptcy and if not, what happens then. Jim Awad is chairman of Plimsoll Mark Capital. SOUNDBITE: JIM AWAD, CHAIRMAN, PLIMSOLL MARK CAPITAL (ENGLISH) SAYING: "What a problem in Cyprus could do is create fear and freeze up the financial markets in other weak countries due to psychology rather than reality and the psychology can create an unhappy reality, which would affect both the European and U.S. markets." Wall Street is willing to bet, for now, that the Cyprus situation gets resolved without causing trouble for larger EU members. With that in mind, Wall Street vacillated between plus and minus. By the end of the session - the Dow was up a few points, while the S&P 500 and Nasdaq were down by a few. The Cyprus vote came hours after European markets closed down for the day led by a 1.3 percent drop in France. Uncertainty continues - banks in Cyprus are closed until later this week and the ECB has threatened to end any emergency assistance for the country's troubled banks. There is some hope, though, that Russia will come to the rescue as it has done for Cyprus in times past.