Technology stocks drag markets lower

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NEW YORK (CNNMoney) U.S. stocks fell Thursday, with technology stocks weighing on the broader market following lackluster earnings from Oracle.

The Dow Jones industrial average slipped 0.6%, with Cisco (CSCO, Fortune 500), Hewlett-Packard (HPQ, Fortune 500) and IBM (IBM, Fortune 500) among the biggest laggards. The S&P 500 declined 0.8%, while the tech-heavy Nasdaq fell 1%.

Oracle (ORCL, Fortune 500) was the biggest drag on both the S&P 500 and Nasdaq 100. Shares of the software giant tumbled nearly 10% after its third-quarter sales fell short of forecasts.

Investors are using high-profile earnings disappointments like Oracle's as an "excuse" to step back following a significant advance in stocks, said Michael Sheldon, chief market strategist at RDM Financial Group.

The Dow and S&P have gained 10% since November, when stocks first began their big advance. During the past couple of weeks, the blue chip index has soared to record highs, while the S&P has remained less than 1% below its all-time high.

Given that the market has climbed so high so quickly, Sheldon said it would be "no surprise" to see a pullback of 3% to 5%. But he suspects that will be short-lived, as investors use the retreat to add to their stock positions.

Related: 5 reasons the bull market has room to run

The uncertainty in Cyprus has also been giving investors reason to take a breather.

While Cyprus hasn't spurred a huge sell-off in financial markets, Sheldon said investors still want to see that all the major players in Europe can work together to resolve the country's debt burden.

Early Thursday, the European Central Bank told the troubled nation it had until Monday to sort itself out or face the consequences of a potential financial collapse and/or exit from the euro.

"If this drags out and causes more infighting among countries in Europe, that could lead to further instability in a part of the world that badly needs continued coordination," said Sheldon.

Related: Google vs. Apple. Which is your favorite?

Meanwhile, investors mulled several reports on the health of the U.S. economy.

Jobless claims totaled 336,000 last week, according to the U.S. Department of Labor. That's up 2,000 from the prior week, but less than the 345,000 forecast by Briefing.com consensus.

The National Association of Realtors said existing home sales in February edged up 0.8% to an annual rate of 4.98 million, a 3-year high but slightly lower than expectations.

The Philly Fed's index rose to 2 in March from -12.5 the prior month. Readings lower than zero signal contraction in the area covering eastern Pennsylvania, southern New Jersey and Delaware. Economists were expecting a reading of -3 for March.

Just days after recalling see-through yoga pants, lululemon athletica (LULU) reported earnings and sales that squeaked past estimates and said it was working closely with manufacturers to resolve the yoga pant issue. The company also said its current quarter and full-year earnings would come in below analysts' forecasts.

KB Home (KBH) shares edged higher after the homebuilder reported that sales surged 59% in the first quarter, as more homes were delivered and prices increased.

Shares of Scholastic (SCHL) sank after the the children's book publisher lowered its forecast for the year a second time as sales of the Hunger Games books remained below last year's levels.

Related: Fear & Greed Index edges into extreme greed

European markets ended sharply lower, while Asian markets ended mixed. The Shanghai Composite added 0.3% and the Nikkei increased 1.3%, while the Hang Seng declined 0.1%.

A report on Chinese manufacturing showed activity expanded at a faster clip than expected by many economists, which may quell worries about the country's economy slowing down.

The dollar rose against the euro, but fell versus the British pound and the Japanese yen.

Oil prices edged lower, and gold prices gained.

The price on the 10-year Treasury rose, pushing the yield down to 1.92% from 1.94% late Wednesday.

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Louisville tops NCAA dollar rankings too

Louisville basketball coach Rick Pitino doesn't have much to be unhappy about. His school is the top ranked in the NCAA tournament, as well as in profits and revenue.

NEW YORK (CNNMoney) The University of Louisville heads into the NCAA tournament at the top of the rankings in more ways than one. It's the college basketball king of revenue and profits.

The school, which also has the No. 1 ranking in the March Madness tournament, earned a profit of $26.9 million from its men's basketball program last year, according to figures that schools have to file with the Department of Education and analyzed by CNNMoney. That's about 60% more than the $16.9 million profit at the University of North Carolina, whose men's hoops team had the second largest profit.

Louisville turned that profit on revenue of $42.4 million. Syracuse came in second with $25.9 million in revenue.

Louisville's profit margin is a whopping 63% -- enough to make any NBA owner green with envy. The pros pay just over half of their revenue to the players.

But Louisville's profit margin is only the fourth fattest. North Carolina rules on that measure with a 70% margin. The basketball programs at Minnesota and Ohio State also have higher margins than Louisville.

Watch NCAA games live

Of course, not every school is churning out cash from their basketball teams. Three dozen schools out of the 345 Division 1 programs that reported figures to the DOE posted losses. But all told the Division 1 schools reported a combined profit margin of 25% on $1.3 billion in men's basketball revenue.

Louisville and Syracuse are both members of the soon-to-be gutted Big East conference. Conferences are the major source of money for the various schools, because each school's share of the $700 million pie the NCAA gets from TV broadcast partners CBS (CBS, Fortune 500) and Turner Sports each year is based on the success of all the teams in its conference over a number of years, not an individual school's record that season. (Turner Sports is owned by CNNMoney parent Time Warner (TWX, Fortune 500).)

Read Bleacher Report's NCAA Tournament coverage

But Louisville and Syracuse are likely to stay near the top of the basketball revenue rankings next year even as they leave the Big East. That's because they are moving to the ACC, the powerhouse conference that is home to North Carolina and Duke.

The conferences also split the football bowl game payouts each year evenly between their members. The chase for dollars has so many schools changing conferences in recent years that keeping track of who's going where has become as difficult as hitting a half-court shot.

Related: Notre Dame football tops Alabama - in dollars

So even winning the NCAA title is not a guarantee of a financial whirlwind.

The University of Kentucky, a member of the SEC and last year's NCAA men's champion, brought home only about half the revenue as its in-state rival Louisville.

The SEC, while a football powerhouse, has not done as well in March Madness as some of the other major conferences. So Kentucky finished only 21st in the ranking of the most profitable basketball programs, just behind Big 10 member Northwestern University, which has never made it into the basketball tournament but benefits from the success of other Big 10 schools.

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Home sales hit highest rate in 3 years

Home sales shares post best month since November 2009 as rising prices brought both buyers and sellers back to the market.

NEW YORK (CNNMoney) Sales of previously owned homes reached an annual rate of nearly 5 million in February, the strongest pace in more than three years.

The report Thursday from the National Association of Realtors was the latest sign of a housing recovery that has become a major positive force for the economy.

The February rate of 4.98 million homes was up 10% from a year earlier, although it was only 1% higher than the revised January pace.

It was the best month since November of 2009. But that early spike in sales was caused by a temporary $5,000 tax credit for home buyers in place at that time. The current strength is due to improved fundamentals, including a drop in foreclosures and near record low mortgage rates. A decline in the nation's unemployment rate is also helping.

The median sales price in the month was $173,600, up nearly 12% from a year ago and in keeping with the trend of rising home prices. The rising prices may have prompted some more people to put their homes on the market as the supply of homes for sale rose for the first time since July. But the supply was still very tight -- only about a 4.7 month supply at the current sales pace.

"The real news is the rise in the inventory," said Paul Diggle, property economist with Capital Economics in a note Thursday. "This is the first increase in supply of any real significance for more than two years. It's too early to say if the trough in supply is behind us, but we get the sense that it's close."

Distressed home sales, which include foreclosures and short sales sold for less than is owed on the mortgage -- accounted for 25% of February sales, up slightly from January but well below the 34% share of the market a year ago.

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Office supplies, grocery stores among government cuts

Pentagon-run groceries are slated to be closed one day a week starting in late April thanks to forced federal budget cuts.

WASHINGTON (CNNMoney) Government grocery stores on U.S. military bases around the world will close one day each week starting in May.

The Environmental Protection Agency and U.S. Customs and Border Protection have already started buying fewer office supplies. And at the Department of Interior, employees have had to cancel previously-approved conferences they were planning to attend.

These are just some of choices federal agencies are making on the edges to tighten their belts. By doing so, they hope to minimize harsher measures, including layoffs and furloughs, triggered by the $85 billion worth of forced budget cuts that took effect on March 1, also known as the sequester.

In a small effort to cushion the cuts, the Senate on Wednesday agreed to prevent furloughs of food inspectors and to fund a program that paid some tuition for service members in a bill that would fund the government through the end of September.

Many federal agencies are already working under hiring freezes, no bonuses and curtailed overtime, according to a memo compiled by a union group.

Anticipating the cuts, the White House budget office last month ordered "increased scrutiny" for all new hires, bonuses and travel, even for those who don't work directly for the government.

Related: Defense worker furlough notices hit Friday

Whether the hiring freezes and travel cuts really prevent furloughs of other workers depends on the agency.

Patrick Lester, director of federal fiscal policy at the watchdog group Center for Effective Government, said some larger agencies, such as the Government Accountability Office, have been able to prevent furloughs just by enacting a hiring freeze.

Agencies such as the Transportation Security Administration have been able to absorb the cuts better than other agencies just by reducing overtime.

"So TSA can cut overtime and that's one way they can avoid furloughs," Lester said. "It really depends on how agencies are structured. In some cases, a hiring freeze just isn't going to get the job done."

In the last five months, the Food Safety and Inspection Service cut travel and conferences for employees, and even closed five district offices to prepare for budget cuts, said Michael Young, a budget director at the Department of Agriculture, during a Tuesday House hearing.

Despite the cuts, the agency couldn't stop food inspectors from facing a furlough for 11 days between April and September. But a congressional funding measure, which the House sent to President Obama on Thursday, will prevent the food inspector furloughs.

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Cyprus is sitting on a natural gas gold mine

NEW YORK (CNNMoney) "Cyprus" and "luck" haven't exactly been synonyms lately, but at the end of 2011, American firm Noble Energy (NBL) made a find that was very lucky indeed: A giant natural gas field off the country's southern coast.

The field is modest by international standards. Noble estimates it could yield between 5 trillion and 8 trillion cubic feet of gas. For comparison, fields being developed off the Israeli coast have four times as much gas. Qatar, one of the world's largest gas holders, has nearly 900 trillion cubic feet.

But for a country roughly as large as Connecticut, with about the same population as Manhattan, that's a lot of gas.

"It was the third largest conventional discovery in 2011," said Michael Stoppard, chief strategist for global gas at the consultancy IHS. "It dwarfs local demand for the next 50 years."

That means Cyprus, currently trying to secure a European bailout to cover huge budget deficits and bad bank holdings, could start exporting the gas to raise money. There's also the possibility that some energy companies might offer the country cash upfront in return for a share of the gas.

Related: Europe gives Cyprus until Monday to agree to bailout

So how much can Cyprus make off its gas? That's hard to say.

Some of it would likely be used for local consumption. Cyprus currently gets most of its energy from burning oil -- an expensive proposition. The rest of the gas would probably be liquified, loaded onto to tankers, and sent to markets in Western Europe and Asia.

That's all pretty pricey. Wells need to be drilled, and pipelines have to be built from the gas field itself -- some 100 miles offshore -- to the Cyprus mainland. A liquefaction plant costs billions to construct. Ultimately, it would probably take $10 billion in investment and seven or eight years to get the gas flowing, according to Laszlo Varro, the head of gas, coal and power at the International Energy Agency, a research organization funded by energy importing countries.

By 2020, under the most optimistic conditions, Varro said Cyprus' natural gas could be injecting $3 billion a year into the economy and generating perhaps $1 billion in tax revenue. The country's current economic output is around $24 billion a year, with $11 billion in government spending.

"It will be a great help," said Varro. "But can Cyprus sit back and rely on this? No. This isn't Qatar."

Varro stressed that those revenue projections are optimistic. In addition to the financial hurdles to developing Cyprus' gas, there are political obstacles. Turkey, engaged in a decades-long territorial dispute with Cyprus, is loathe to see the fields developed as purely Cypriot property. It dispatched warships to monitor Cyprus' recent exploration attempts.

Given its current financial woes, Cyprus may be tempted to cash in on the gas early. Russian energy giant Gazprom has offered the county assistance in exchange for some of the gas rights, according to the New York Times. That might make the Europeans nervous, given Russia's already large influence over Europe's gas market and its propensity to use energy for geopolitical leverage. Varro said there are probably plenty of other cash-flush organizations -- everything from oil companies to banks to pension funds -- that might offer a similar deal.

But Cyprus should be cautious about auctioning off its future wealth. If structured properly, a cash-for-gas deal could be beneficial for the country, Varro said. But there are examples from recent history -- Venezuela and Mexico included -- where countries have mortgaged their energy wealth only to find themselves, years later, on the losing end of the deal.

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Miami Heat's winning streak sparks sales rush

Fans are snapping up Miami Heat uniforms and other merchandise during the team's current winning streak.

NEW YORK (CNNMoney) The Miami Heat's extraordinary winning streak has captured the attention of basketball fans across the country, and the team's merchandise is flying off shelves.

Sales of Heat items are up 30% year-to-date compared to 2012, according to SportsOneSource, a research service that tracks sales of licensed sports merchandise. Sales of Heat items at the NBAstore.com are up 40% since the start of the streak, according to league spokeswoman Amanda Thorn.

The Heat won its 24th straight game Wednesday, coming back from a 27-point deficit in the second half to defeat the Cleveland Cavaliers. If the team keeps winning through its April 9 game, it would break the league's record of 33 straight wins, which was set by the Los Angeles Lakers in the 1971-72 season.

Related: LeBron to pitch Dunkin Donuts in Asia

The Heat's sales spike far outpaced the sales of the rest of the league. The NBA says its domestic league merchandise sales are up less than 10% year to date. SportsOneSource's independent reading on NBA sales shows a 25% decrease so far this year. It attributes that drop to the "Linsanity" phenomenon during the year ago period. The sudden emergence of then New York Knicks player Jeremy Lin sparked a huge but short-lived spike in sales.

Related: Heat owner loud about his team, quiet about his troubled company Carnival

Thorn said that the surge in sales has moved Heat items into the No. 2 position at the league's flagship store on Fifth Avenue in New York, behind only the hometown Knicks.

However the Heat's growing sales mean relatively little to the team's own bottom line. Proceeds of all licensed NBA merchandise is split evenly among all 30 teams.

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Rajaratnam's brother faces insider trading charges

Raj Rajaratnam, Rengan's older brother, leaves court after he was sentenced to 11 years in jail in October 2011.

NEW YORK (CNNMoney) Rengan Rajaratnam may be following in his brother's footsteps.

Federal officials announced Thursday that Rajaratnam, 42, has been charged with insider trading in connection with his work at his older brother Raj's now infamous hedge fund, Galleon Group.

Raj Rajaratnam, 55, was convicted on 14 counts of insider trading in May 2011, accused of reaping $64 million in ill-gotten gains. He was sentenced to 11 years in prison, a record for insider trading, and fined nearly $93 million.

Prosecutors allege that while Rengan was working as a portfolio manager at Galleon, Raj shared insider tips with him in 2008 about tech firms Clearwire (CLWR) and AMD (AMD, Fortune 500). The brothers allegedly earned nearly $1.2 million from their subsequent trades.

Rengan's attorney, David Tobin, did not immediately respond to requests for comment.

Related: SEC charges state of Illinois with securities fraud

The government has targeted Galleon over the past few years in a sprawling investigation that has ensnared a number of the now-defunct firm's former employees as well as co-conspirators from well-known companies.

"Along with his brother Raj, Rengan Rajaratnam was allegedly at the heart of an insider trading scheme that swept up an unprecedented number of people in its web of corruption," Manhattan U.S. attorney Preet Bharara said in a statement.

The inside information about Clearwire allegedly came from former Intel (INTC, Fortune 500) employee Rajiv Goel, while the AMD tips allegedly originated with Anil Kumar, a former partner at the consulting firm McKinsey & Co. Both Goel and Kumar pleaded guilty to insider trading and received probation sentences last year.

In the highest-profile Galleon case thus far, former McKinsey head and Goldman Sachs (GS, Fortune 500) board member Rajat Gupta received a two-year prison sentence last year for allegedly providing insider tips to Raj Rajaratnam. Gupta has appealed the conviction.

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