The euro zone’s decision to part-fund a bailout of Cyprus by taxing bank deposits drove down shares, the euro and the bonds of its troubled sovereign debtors on Monday.

Hopes that the tactic will not be used elsewhere later helped to contain financial market losses.

The bloc struck a deal on Saturday to hand Cyprus rescue loans worth 10 billion euros ($13 billion), but defied warnings – including from the European Central Bank – and imposed a levy that would cost those with cash in the island’s banks between 6.75 and 9.9 percent of their money.

Stocks sagged on Tuesday as investors paused after a seven-session string of gains and the Bundesbank’s chief warned the euro zone’s crisis has not ended.

On Wall Street, investors’ confidence has grown in recent months, leading to a gain of more than 10 percent for the year by the Dow and nearly 9 percent by the S&P 500. Signs of improvement in the economy and the Federal Reserve’s quantitative easing have helped to drive the advance.

Heading into Tuesday, both the Dow and benchmark S&P 500 index had rallied for seven consecutive sessions, with the Dow closing at another record high on Monday. The S&P is within reach of its all-time closing high of 1,565.15, set on October 9, 2007.

Stocks ended flat on Thursday, giving up modest gains late in the session, denying the Dow a chance to inch closer to all-time highs.

The S&P 500 still managed to close out February with a fourth straight month of gains. JC Penney Co Inc (JCP.N) was the day’s biggest loser, falling 17 percent to $17.57 after the department store operator reported a steep drop in sales.

The U.S. economy grew slightly in the fourth quarter, a turnaround from an earlier estimate showing contraction, and a drop in new claims for unemployment benefits last week added to a batch of data suggesting the economy continues its sluggish improvement.

Roubini has been pretty negative over the past few months, despite the rally in asset prices and a general turn in sentiment toward the economy and markets on the Street.

Now, it seems like Roubini is finally coming around to the consensus view. In a way.

Coincidentally, his latest interview – with Yahoo! Finance’s Aaron Task – comes hot on the heels of the biggest sell-off this year, and as Task notes, people like Dennis Gartman are now rushing for the sidelines.

Factory activity grew the most in nearly two years in January and the number of new claims for jobless benefits dropped to a five-year low last week, giving surprisingly strong signals on the economy’s pulse.

Financial information firm Markit on Thursday said its preliminary Purchasing Managers Index for manufacturing rose to 56.1 this month, its best showing since March 2011. A reading above 50 indicates expansion.

U.S. stocks were little changed near five-year highs on Tuesday as investors held back from making large bets ahead of earnings from key tech companies.

Both the Dow and S&P 500 closed at their highest levels so far in this earnings season, with the gains largely coming on better-than-expected results. But despite bullish statements from major companies, many investors are worried economic uncertainty in the fourth quarter hurt earnings and revenues.

Weaker-than-expected economic data had little impact on stocks. Existing-home sales unexpectedly fell in December, dropping 1 percent, according to the National Association of Realtors. Analysts were looking for a rise of 1.2 percent.

Germany’s central bank announced Wednesday that it would reverse a decades-old policy of storing gold abroad and reclaim $36 billion of bullion from New York and Paris to ensure that half of the country’s reserves were on home soil by 2020.

About 674 metric tons of gold — sent abroad to keep it out of the reach of the Soviet Union during the Cold War — is to be “repatriated” and deposited in the Bundesbank’s vaults in Frankfurt. The move would eliminate Germany’s gold reserves in Paris and reduce those in New York, but would leave its bullion in London untouched.

Federal Reserve Chairman Ben S. Bernanke is giving himself an escape clause from his latest stimulus steps in case the economy finally gains momentum.

He’s made his third round of quantitative easing open-ended — meaning the program doesn’t have a set time frame — and signaled he may adjust its pace if needed. In December, the policy-setting Federal Open Market Committee added outright Treasury purchases to its mortgage-bond buying, saying it would acquire U.S. government debt “initially” at a pace of $45 billion a month on top of $40 billion in home-loan debt.

Consumer confidence waned last week and firings unexpectedly climbed, the first sign that higher U.S. payroll taxes will slow the economic expansion at the start of this year.

The Bloomberg Consumer Comfort Index fell to minus 34.4 in the seven days ended Jan. 6 from minus 31.8 the prior period, the biggest one-week drop since August. Jobless claims increased by 4,000 to 371,000 in the week ended Jan. 5, according to Labor Department figures.

Paychecks are shrinking after Congress last week let the tax that funds Social Security benefits revert to 6.2 percent from 4.2 percent. That means Americans will have to rely on increases in salaries to counter some of the lost income at the same time the job market shows little sign of further progress and the debate in Washington turns to federal spending cuts and the debt.

Gold declined for the second time in three days in New York as a stronger dollar eroded appeal of the precious metal as an alternative investment.

The dollar rose as much as 0.4 percent against a basket of six major currencies as investors awaited tomorrow’s European Central Bank meeting. Gold slid to a four-month low on Jan. 4 after minutes from the Federal Reserve indicated that policy makers may end $85 billion in monthly bond purchases this year.