<h3>Can someone help me understand the stock market/situation in Cyprus?</h3>
I never quite understood how the Dow is influenced by things happening overseas. Particularly, recently there was a situation on the island of Cyprus that brought our U.S Dow Jones Industrial average down after the country said they would sieze money from peoples bank accounts in order to prevent a government shut down or something like that. Can anyone tell me how this affected our stock market, and what Cyprus was trying to do exactly. I just don't seem to get it. Thank you, best answer gets 10pts! Please explain, not just website links although those are welcome.
<strong>Cyprus best answer:</strong>
<p><i>Answer by Mohammad</i><br/>1. There are several reasons for things happening overseas affecting U.S Dow Jones Industrial average down:
-Companies in Dow Jones might be selling their products to affected countries overseas. Happenings in those countries will affect the Dow companies profits, and, thereby, Dow Jones Index.
-Residents of the affected countries might have invested in Dow companies. Adverse developments in those countries might force the residents of those countries to sell their Dow stock. This will bring the prices of Dow shares and thereby the Dow Index will be affected.
-Financial crisis in one country might have a cascading effect on the global economy. This will affect business prospects of Dow companies, reflecting in decline in the prices of those companies.
-Sentiments in other Stock Exchanges get affected by performance of other Stock Exchanges abroad.
2. Dow was affected by Cyprus crisis because of this type of factors.
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.</p>
<p><strong>Winter holiday in Cyprus</strong>
<img alt="Cyprus" src="http://farm3.staticflickr.com/2124/2396593518_bf819d4fd8.jpg" width="400"/><br/>
<i>Image by <a href="http://www.flickr.com/photos/50861030@N00/2396593518">tmb2610</a></i>
Cyprus November 2004</p>
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