U.S. stocks fell, after the Dow Jones Industrial Average reached record highs last week, as a levy imposed by euro-area leaders on Cypriot bank deposits sparked concern the region’s debt crisis is intensifying.Citigroup and Bank of America retreated more than 1.3 percent as financial shares slumped. Transocean slipped 0.9 percent after the offshore-rig contractor said its board opposes the dividend and director nominees proposed by its biggest shareholder, Carl Icahn. Carnival Corp. declined 1.7 percent amid analyst downgrades.

The Standard & Poor’s 500 Index dropped 0.6 percent to 1,551.78 at 10:16 a.m. in New York. The S&P 500 has still gained 2.4 percent this month amid optimism that central banks around the world will continue stimulus measures. The Dow declined 42.58 points, or 0.3 percent, to 14,471.53 today. Trading in S&P 500 stocks was 6.6 percent below the 30-day average at this time of day.

“The EU still doesn’t have a good way of dealing with the periodic banking crisis that they have,” Bernie Williams, a San Antonio-based money manager at USAA Investments, which oversees over $54 billion, said in a phone interview. “It does put a lot of angst and anxiety.”

Euro-region finance ministers forced depositors in Cypriot banks to share in the cost of rescuing the island nation, reducing the cost of the bailout by $7.5 billion to $13 billion. The country accounts for less than half a percent of the 17-nation euro-area economy.

A parliamentary vote on the levy due to take place today was postponed. Equity markets are closed in Cyprus and Greece for a scheduled bank holiday today.

 The S&P 500 has climbed 10 percent over the past year as the U.S. economy strengthened and European Central Bank President Mario Draghi pledged to do whatever is necessary to defend the euro. The Dow average climbed to a record 14,539.14 on March 14.

“Draghi’s backstop to do whatever it takes to save the euro is still there,” Patrick Spencer, head of U.S. equity sales at Robert W. Baird & Co. in London, said in a phone interview. “With the Dow hitting all-time highs and with the S&P looking to do the same, the market’s proved very resilient, so any weakness should be taken as a buying opportunity.”

Citigroup, the third-largest U.S. lender, declined 2.3 percent to $46.18. The bank said it plans to redeem $3 billion of trust preferred securities after getting U.S. approval for its capital plan.

Bank of America dropped 1.3 percent to $12.41 and Goldman Sachs Group Inc. slipped 1.9 percent to $151.83. JPMorgan Chase & Co., the biggest U.S. bank by assets, lost 1.2 percent to $49.41.

Transocean declined 0.9 percent to $53.10 after its board members dismissed Icahn’s proposals. He suggested March 7 that John Lipinski, Jose Maria Alapont and Samuel Merksamer be added to the board. Icahn will also ask investors at the annual meeting on May 17 to vote in favor of a $4-a-share annual dividend, which he first proposed in January.

Carnival slid 1.7 percent to $34.37. At least three analysts cut their ratings on the cruise operator. The company, beset by mishaps at sea this year, last week reduced its annual earnings forecast to reflect costs from an engine fire that crippled the Carnival Triumph in February.

Kimberly-Clark Corp. retreated 0.9 percent to $92.40 after Goldman Sachs cut its recommendation on the stock to sell from neutral. The maker of Huggies diapers and Kleenex tissues has advanced 9.4 percent so far this year.

Apple Inc. added 0.9 percent to $447.83. The company is poised to boost its dividend by more than a half, according to analysts surveyed by Bloomberg, providing investors hit by a share slump with one of the highest yields in the U.S. technology industry.

Chief Executive Officer Tim Cook, who a year ago this month reinstated a dividend and announced a $10 billion buyback, faces mounting pressure to take bolder steps to pay out more of Apple’s $137.1 billion in cash and investments. Investors including David Einhorn’s Greenlight Capital Inc. are pushing for more money as growth slows and competition from rivals such as Samsung Electronics Co. intensifies.

“The accumulation of cash has become excessive,” Brian White, an analyst at New York-based Topeka Capital Markets Inc., said in an interview. He rates the shares a buy, with an $888 price target. “It doesn’t matter which bearish scenario you forecast, they’re never going to need this much cash.”

The CBOE Volatility Index, which measures the cost of using options as insurance against declines in the S&P 500, surged 16 percent to 13.13, after dropping 10 percent last week to its lowest level since February 2007. The gauge, known as the VIX, is down 27 percent this year.

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