Cyprus deadline rattles investors

North American markets weakened on Thursday as worries over a fast-approaching deadline for the debt woes in Cyprus intensified, overshadowing economic data on both sides of the border.

The S&P/TSX composite was down 78.68 points at 12,747.87, while the TSX Venture Exchange dipped 2.99 of a point to 1,102.98.

After a failed plan to tax bank savings accounts and raise ¤5.8-billion, Cyprus has returned to the drawing board to iron out a “Plan B.” The small Mediterranean island has four days to reach an agreement designed to raise enough money to avoid bankruptcy.

The European Central Bank warned Thursday it will pull the plug on the country’s banks at the start of next week if no solution is found.

On Wall Street, the Cyprus effect was combined with a surprise drop in sales at Oracle during its fiscal third quarter, which yanked down technology stocks and knocked the wind out of a climb that had pushed the Dow to new record highs just a week ago.

The Dow Jones industrials dropped 90.24 points to 14,421.49. The Nasdaq was down 31.59 points at 3,222.60 and the S&P 500 index slid 12.91 points to 1,545.80.

“You’ve also got the U.S. market that has come so far so quickly,” said Paul Taylor, chief investment officer, BMO Harris Private Banking.

“I think it’s critically important that we see some outcome that allows for a solution to Cyprus’ debt situation, but doesn’t put the eurozone’s banking system at risk.”

In economic data, Statistics Canada said that retail sales rose 1% in January to $38.9 -billion, on higher sales at motor vehicle and parts dealers.